State Pension Forecasts

Lord Woolmer of Leeds: asked Her Majesty's Government:
	When they intend to provide United Kingdom citizens with the facility to have an on-line calculation of their state pension forecasts.

Baroness Hollis of Heigham: My Lords, we are undertaking a programme of work that is designed to improve the frequency and quality of personal information that is available to people about their levels of state and private pensions and their likely retirement income.
	We are currently exploring the feasibility of making state pension forecasts available on-line, as my noble friend asked.

Lord Woolmer of Leeds: My Lords, I thank my noble friend for that Answer. Can she confirm that the general public will be able to obtain forecasts of their state pension on-line by 2004? Will those forecasts be available in real time, as opposed to the current target of a 40-day turnaround period in responding to inquiries? Do the Government have any plans to require the personal pension providers to provide forecasts on-line by 2004, so that individuals can compare meaningfully state and personal pension provisions in considering their future?

Baroness Hollis of Heigham: My Lords, my noble friend asked two questions: one about pension forecasting as such and the other about on-line access of forecasts. Perhaps I may deal with each of those points. In terms of the first—pension forecasting—we are currently rolling out combined pension forecasts of private and retirement pensions. There will be about 15 million statements a year going out by 2005-06. Of course individuals can always request their individual retirement pension forecast.
	On the second point—access on-line—one can request the information on-line now. About 2 to 3 per cent of the population do so. But the response comes back by post, and therefore in the normal way as if one had posted the inquiry in. We are conducting a series of feasibility studies over the summer to analyse the cost benefits of on-line forecasting in real time, as my noble friend requested. Perhaps after the summer he might put in a Written Question and I shall tell him where we have got to on the matter.

Lord Marsh: My Lords, can the Minister explain how it is possible to have meaningful forecasts of the state pension, which is not an insurance scheme but hypothecated taxation which can be, and frequently is, changed, in terms of any of the benefits, at any time by any government who happen to be in office?

Baroness Hollis of Heigham: My Lords, the noble Lord is right, which is why it is almost impossible for us to do forecasting of, say, the pension credit and anything that is a means-tested benefit. The pension statements state—and I have a couple of examples here because I was interested in just those same questions—the current entitlement and, should current assumptions still apply, what that benefit would therefore look like when the individual inquirer is 60 or 65.

Lord Addington: My Lords, there is a danger in moving to more on-line services. Does the Minister agree that the current situation of great under-claiming of benefits may well be accentuated by not having face-to-face contact? We will not be able to assume, for instance, that there are questions not being asked. The person will be dependent on knowing which buttons to click on the screen.

Baroness Hollis of Heigham: My Lords, I do not think that my noble friend was suggesting that the only way to access this information would be on-line. At the moment, of 620,000 inquiries per year about retirement pension only 17,000 are on-line. Whether or not an inquirer goes on-line has nothing to do with age. But I should expect that, as now, most pensioners will seek that information by telephone of the new and improved pension service.

Viscount Goschen: My Lords, is the problem one of security with having on-line information—the Government could note that the banks have addressed on-line banking without having too many security issues—or is it simply one of cost?

Baroness Hollis of Heigham: My Lords, I understand that it is a question, first, of funding and, secondly, of the routing device of the government gateways. If the noble Lord wants further information—in other words about the technicalities of the matter—I should be very happy to write to him.

Baroness Greengross: My Lords, does the Minister agree that it is absolutely essential that people get updated information about their entitlement over the next few years, especially women because of the change in their age of entitlement and also people who live abroad and who in many countries do not get their pensions uprated? There is a current court case because of that. On-line would be of particular value to them, so that they would be very well informed.

Baroness Hollis of Heigham: My Lords, I agree absolutely. The more information people have about their projected pension income, the more we can hope that—resources allowing—they will make greater investment in providing for old age.

The Earl of Northesk: My Lords, could the Minister clarify whether there are any data protection implications to the proposed on-line service, particularly in the context of the marriage of an individual's public and private pensions data? I note that the Minister of State, Department for Work and Pensions, Ian McCartney, has stated that data is,
	"provided with [their] consent and that the data shared between the private/public sectors occurs in a controlled environment".
	But should not there be a tick-box on the application form for individuals to give their explicit consent?

Baroness Hollis of Heigham: My Lords, I shall look into the question or whether or not the forms should include the tick-box, but my understanding is that someone gets a combined pension forecast because they ask for it. Therefore, their consent, so to speak, is implied in that action.

Lady Saltoun of Abernethy: My Lords, why cannot the articles come by e-mail instead of by post?

Baroness Hollis of Heigham: My Lords, that is one of the issues we are looking to develop. At the moment, we do not have the e-mail facility. People inquire by e-mail, by telephone and by post. Whatever way one does it, it takes just as long and the answer comes back by post. That is precisely why I am being nagged by my noble friend—quite correctly.

Hand-held Mobile Phones

Lord Astor of Hever: asked Her Majesty's Government:
	When they will follow the example of numerous other countries in banning the use of hand-held mobile phones when driving.

Lord Filkin: My Lords, the Government are satisfied that current legislation provides the police with sufficient powers to enable them to prosecute irresponsible drivers. However, in accordance with our road safety strategy Tomorrow's roads—safer for everyone, we are keeping the need for the introduction of a specific offence under review.

Lord Astor of Hever: My Lords, I am grateful to the Minister for that reply. Does he agree with RoSPA's research—I declare an interest as a former president—which indicates an increasing number of deaths and terrible injuries caused by drivers using hand-held phones while driving, despite all the safety advice and publicity campaigns? If he does, can he tell the House why the Government objected to the Bill prohibiting drivers using hand-held phones, in the other place last Friday?

Lord Filkin: My Lords, the Government agree that using a hand-held mobile phone—or any form of mobile phone—in a car is potentially dangerous. Without going into detail, there is now fairly clear evidence of that from both the United Kingdom and elsewhere. The only difference between us is that the Government's position is that the police consider that they have adequate powers and we are intent on pursuing advertising and promotion to try to ensure that the public, many of whom recognise the danger, adjust their behaviour voluntarily.
	However, we have undertaken to keep the question of creating a specific offence under review. If we are unable to persuade drivers that they should not use a mobile phone while driving, we accept that new legislation may have to be introduced.

Baroness Boothroyd: My Lords, will the Minister explain the position in relation to cyclists who use mobile phones? I have witnessed a horrendous incident in which a cyclist had one hand on the handlebars and the other hand holding a mobile phone, dicing with death around Hyde Park Corner. I confess to having taken the matter into my own hands by using my horn so loudly that the cyclist had no alternative but to drop the telephone. I am sure that the House would like to know the rules and regulations relating to cyclists, who cause great trouble and difficult circumstances by the use of mobile phones.

Lord Filkin: My Lords, I commend the direct action of the noble Baroness, and am delighted to hear that the phone, rather than the cyclist, fell off. I share her desire that the House should know exactly what are the regulations under which cyclists are prohibited from using mobile phones. I am racking my brains to remember whether cyclists are covered by the Highway Code—actually, they must be. The advice in the Highway Code is that one must have proper control over one's vehicle; a bicycle is a vehicle; therefore, cyclists could presumably be prosecuted by the police for failure to have adequate control over their vehicle. If my conjecture is wrong, I shall write to the noble Baroness.

Lord Peyton of Yeovil: My Lords, does the noble Lord agree that "keeping a matter under review" is one of the least satisfying responses that any Member of the House ever receives? Does he further agree that to speak on a hand-held telephone at the same time as driving comes near to defining the offence of driving without due care and attention?

Lord Filkin: My Lords, I agree with the noble Lord that that would be one of the least satisfactory responses that one could give if it were weasel words, not a genuine commitment. But the Government have made clear that next month there will be a further publicity campaign to promote the cessation of the use of mobile phones while driving and two research studies are under way to try to narrow down the risks involved in so using mobile phones. The Government are genuine in what we have said: if we are not able within a reasonable period to persuade the public to shift their behaviour, we shall have no option but to legislate.
	On the noble Lord's second question, which, if I remember it correctly, was about the use of hand-held phones being an especially pernicious and dangerous activity—

Lord Peyton of Yeovil: No, my Lords, it was about due care and attention.

Lord Filkin: Indeed, my Lords, I thank the noble Lord. Under powers given over those who do not have proper control of their vehicle, the police are already able to prosecute. For example, one police force mounted a campaign and imposed fixed penalties on two-thirds of those whom they had stopped having observed them holding a mobile phone while attempting to control a motor vehicle. So the police demonstrated that they could convict people in those circumstances without much difficulty.

Lord Faulkner of Worcester: My Lords, I declare an interest as the current president of RoSPA, and am delighted to follow a distinguished former president. Is my noble friend aware that this October the Irish Republic will join more than 35 other countries in banning the use of mobile phones while driving, with a rigorous system of fines backed up by the threat of imprisonment and penalty points? Road safety campaigners are mystified why the Government do not accept the existing evidence, including the most recent evidence from the Transport Research Laboratory, that using a mobile phone is as dangerous as drinking and driving.
	Is it not time that the Government thought again, bearing in mind that in February my noble and learned friend Lord Falconer wrote to me as follows:
	"If drivers cannot be persuaded that they should not use mobile phones while driving, then we will consider the introduction of new legislation".
	How long do we have to wait before it is quite clear that drivers will not change their habits?

Lord Filkin: My Lords, the short answer is yes and no: yes, I was aware of the Irish position. The recent Direct Line research produced a most interesting report. The Government thought that it was a valuable contribution to the debate. Evidence clearly measured the increase in reaction time demonstrated by drivers when using mobile phones—about half a second—and how serious that could be. That is quite clear, so there is no doubt about the risks involved.
	Neither my noble friend Lord Faulkner of Worcester nor RoSPA are in any doubt about what is the Government's position. In my earlier answer, I said clearly that the matter is under active review. If we do not have evidence that the public are shifting their behaviour, we will legislate. I should have expected a degree of rejoicing about that statement, rather than intemperance in terms of the question.

Viscount Astor: My Lords, the Minister said that the use of any form of mobile telephone in a car is potentially dangerous. Does he regard hands-free telephones—one sees people bellowing into their dashboard—as potentially dangerous, or does he regard that use of a mobile telephone in a car as acceptable?

Lord Filkin: My Lords, the Government's position—and the Highway Code—is explicit on the matter. Hands-free mobile phones are also dangerous. The evidence for that, in the UK and elsewhere, is clear. There is a popular misconception that because you are not holding the damned thing, you are, in some way, safer. In practice, it is the mental distraction that causes the problem, just as much as holding the phone in the hand.
	I apologise to the House for using somewhat unparliamentary language. I shall leave it at that.

Lord Jacobs: My Lords, does the Minister agree that, given the fact that two drivers were observed driving buses down Oxford Street with one hand on the steering wheel and one hand holding a mobile phone, the present legislation is not adequate?

Lord Filkin: My Lords, the essential debate is not whether such action is dangerous or whether the public generally believe it to be dangerous—they do. The debate is about whether we can shift public behaviour without legislation. The Government's hope has been that enough publicity and enough common sense would remove the necessity for laws and regulations in all cases. However, if the practice were to persist in a way in which many noble Lords would feel is unsatisfactory and we were unable to shift the public's view, we would have to consider the matter further.
	It is grossly irresponsible of public service vehicle drivers to behave in that way. They should know their responsibilities better than anybody else.

Terrorism: International Law Enforcement

Lord Archer of Sandwell: asked Her Majesty's Government:
	Whether they have initiated discussions with a view to clarifying the limits of legitimate intervention in the territory of states harbouring terrorists.

Baroness Symons of Vernham Dean: My Lords, Article 51 of the United Nations Charter makes it clear that governments have a right to take action in self-defence. Military action against terrorists is very much a last resort, but the Government are prepared to take military action in self-defence, fully in accordance with international law, when necessary. In various multilateral fora, the Government have discussed the problems posed by terrorism. Those discussions addressed the problem of terrorists operating in areas in which a state either cannot establish law and order or knowingly harbours and protects terrorists.

Lord Archer of Sandwell: My Lords, I thank my noble friend for that thoughtful response. Does she agree that there is a consensus that national sovereignty cannot provide a licence to commit mass murder? Does she also agree that international law enforcement is at a stage akin to the sheriff raising a posse of those whom he could persuade to join him? The problem is exacerbated because we do not have a sheriff; we have nation states—however well intentioned—who place themselves at the head of coalitions. Is there not an urgent need for an internationally recognised authority to bring to bear objective judgment and legitimise appropriate interventions? Can the Government work on that?

Baroness Symons of Vernham Dean: My Lords, I agree that national sovereignty is never a licence to commit what my noble friend calls mass murder. However, he should consider the fact that Article 51 of the United Nations Charter is enormously important because it gives the right to take action in self-defence. That action must, of course, be proportionate and lawful.
	My noble friend asks what else we can do to achieve international consensus. As your Lordships will know, there was discussion in the United Nations—particularly after the terrible events of 11th September—where we addressed issues such as the financing of and recruitment to terrorist organisations and how those activities could be stopped. In the Commonwealth, we have addressed legal and judicial issues, and, in the EU, we have considered plans of action to combat terrorism. Several fora are addressing those issues. Although we are only starting, we are making useful progress.

Lord Howell of Guildford: My Lords, does the Minister agree that objective judgments about the harbouring of terrorists are, sadly, difficult to achieve? When one examines the detail of UN resolutions—not only 51 but 56, 1368, 1373 and 1378—one sees that they just about justify all forms of self-defence, individual and collective, in hunting down terrorists. That leads us to conclude that the real problems do not lie in the legalities but in the practicalities. No nation can hunt out terrorists alone; the operation requires the most intimate intelligence collaboration. Even a great nation such as the United States cannot do it alone.

Baroness Symons of Vernham Dean: My Lords, I agree with almost every word the noble Lord said. His remarks reflect debates in your Lordships' House on this difficult issue on which many different points of view have been brought to bear. Objective international judgments as to what is a terrorist in the first place are, of course, enormously difficult to arrive at, as we have discussed. I have sat round tables in the past few months and have heard the Provisional IRA described as freedom fighters. Others around those tables made remarks that were equally difficult for people from other countries to defend.
	The issue is how to get some sort of international consensus about what can be done practically. We are addressing that through the fora to which I referred. When an act of terrorism is perpetrated, there should be a proper international response.

Lord Avebury: My Lords, does the Minister agree that there is a safeguard in Article 51? A state that crosses an international frontier in the exercise of self-defence must notify the Security Council, and, if it is doing its job properly, the Security Council ought to debate such notifications. If a state crosses an international frontier without complying with that obligation, the Security Council should take note of that and censure the state concerned.

Baroness Symons of Vernham Dean: My Lords, that is entirely right. I remind the noble Lord that UK participation in, for example, the military action in Afghanistan accords with international law. The action was taken in self-defence, to prevent further terrorist attacks, and we did, indeed, notify the president of the Security Council.

Lord Wallace of Saltaire: My Lords, it is, perhaps, time to revisit Article 2 sub-paragraph 7 of the UN Charter, as we have gone a long way beyond the old idea of state sovereignty in this and many other matters. Will Her Majesty's Government introduce a broader debate within the UN about how far all states—including the most powerful—must accept that state sovereignty is no longer something to which they can cling in order to exclude external criticism and intervention in domestic matters?

Baroness Symons of Vernham Dean: My Lords, the problem with the noble Lord's thesis is how we get some sort of consensus in the abstract on the issues. That is why we have supported the more pragmatic approach of the UN counter-terrorism committee, under the chairmanship of Sir Jeremy Greenstock. It seeks to respond to all member states by giving a critique of the domestic policies of those states. That is the practical approach. So far, over 50 letters have been sent, and Sir Jeremy's committee plays an invaluable role in driving forward the international implementation of UNSCR 1373. That is the sensible, practical way forward, as opposed to trying to address issues on which we will not get consensus, particularly at such a time of heightened international tension.

Public Sector Jobs

Lord Campbell of Croy: asked Her Majesty's Government:
	Whether they foresee further significant reductions in the next five years in jobs in the public services through redundancies.

Lord McIntosh of Haringey: My Lords, public services are, self-evidently, a high priority for the Government. Generally, we expect staff numbers to increase over the next five years, in support of increasing levels of public service provision. Between 1997 and 2000, the number of public sector jobs increased by 140,000.

Lord Campbell of Croy: My Lords, I am grateful to the Minister for his reply. Following the recent closing of post offices throughout the country, can he confirm that between 2,000 and 3,000 urban post offices are also to be closed in the next two years? Are the Government preparing the way for employees to find work elsewhere?

Lord McIntosh of Haringey: My Lords, the closure of post offices has proceeded over a considerable number of years, not only under one administration. But I agree that it is a fact that Consignia has plans to close a large number of urban post offices. Clearly, the jobs of those who work in such post offices, whether they are themselves sub-postmasters or employees, is very much a concern of the management of Consignia, which has responsibility for these matters.

Lord McNally: My Lords, does the Minister agree that, over the past 20 years, the public service has been bedevilled by the constant belief by successive governments that services somehow can be provided more efficiently or of a higher quality in the private sector? Is it not time for the Government to declare their belief in the public service ethos and to provide the resources and training that will give us a public service and the public servants whom we can be proud of and who can be proud of their jobs?

Lord McIntosh of Haringey: My Lords, it has been time to do that for the past five years and the Government have been doing it for the past five years. We have never subscribed to the view that the public sector is bad and the private sector is good. We have always taken the view that the quality of life in and, indeed, the economy of this country depend on an effective and flourishing public sector. In addition to that general recognition, we are very much taking the steps to which the noble Lord, Lord McNally, referred. We have been carrying out a cross-cutting review of the public sector labour market with the specific aim of ensuring that we strike a proper balance between supply and demand.

Lord Roberts of Conwy: My Lords, the noble Lord gave the figure of 140,000 as the increase over the past five years. Does he anticipate that the future increase in public sector employment will be of the same order, smaller or larger than the figure he gave for the past five years?

Lord McIntosh of Haringey: My Lords, the figure I gave was for three years rather than five years. Yes, we expect that there will be further increases. If we consider that the figure of 140,000 includes, for example, an additional 12,000 teachers, an additional 24,000 full-time equivalent support staff in our schools, an additional 20,000 nurses and midwives, and an additional 7,000 doctors, and then look at staffing levels in our health and education services—to take only two examples—it can be seen that there is scope for further increases.

Baroness Gardner of Parkes: My Lords, can the noble Lord say whether the considerable emphasis now being placed on public/private partnerships will involve the transfer of many people from public sector employment into the private sector? If so, will those workers' rights be protected?

Lord McIntosh of Haringey: Yes, my Lords, PPPs could well involve transfers from the public to the private sector. However, the original Question addressed the matter of redundancies in the public sector, which would not arise in the case of a transfer. I can confirm that the transfer of undertakings regulations do provide protection to those who are transferred.

Baroness Byford: My Lords, perhaps I may return to the original response given by the Minister to my noble friend with regard to post offices. The Minister knows that there is great concern among those who use post offices, not least among those who collect their benefits and pension payments from post offices. If such post offices are to be fewer in number, so that the cost of having to go and collect benefits and pensions rises, will any other provision be made to help people in those circumstances?

Lord McIntosh of Haringey: My Lords, other provisions are being made to help people in those circumstances, such as the extension of banking services and the plans for a universal bank, as well as facilities to have benefits payments paid directly into an account, including a universal bank account. These are very much designed to help people who find it difficult to get to a post office now, let alone after any reduction in the network.

The Earl of Northesk: My Lords, are the difficulties of Consignia an example of the Government's commitment to what works in the context of public services?

Lord McIntosh of Haringey: My Lords, the principle of what works was made evident in my reply to the noble Lord, Lord McNally. We are not ideologically opposed to or supportive of either the public or the private sector. We believe that the public sector works in a large number of areas where the private sector clearly does not work. So far as concerns the Post Office and Consignia, clearly there are problems with Consignia and its economic viability which must be addressed by the Consignia management.

Baroness Sharples: My Lords, the noble Lord referred to large numbers of new nurses and teachers. How do those figures compare with the number of people in fact leaving the teaching and nursing professions?

Lord McIntosh of Haringey: My Lords, the figures I gave were net increases in the teaching and NHS workforces. They are not recruitment figures.

Copyright, etc. and Trade Marks (Offences and Enforcement) Bill

Brought from the Commons; read a first time, and to be printed.

Divorce (Religious Marriages) Bill

Brought from the Commons; read a first time, and to be printed.

Commonhold and Leasehold Reform Bill [HL]

Lord Irvine of Lairg: My Lords, I beg to move that the Commons amendments be now considered.
	Moved, That the Commons amendments be now considered.—(The Lord Chancellor.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

[The page and line refer to Bill 51 as first printed for the Commons.]

COMMONS AMENDMENTS

1 Clause 3, page 2, line 26, leave out paragraph (d)
	2 Clause 6, page 3, line 29, leave out from "be" to end of line 30 and insert "altered by the Registrar under Schedule 4 to the Land Registration Act 2002 (alteration of register).
	3page 3, line 39, leave out "rectification" and insert "alteration"
	4 page 4, line 6, leave out from first "of" to "(indemnity)" in line 7 and insert "Schedule 8 to the Land Registration Act 2002"

Baroness Scotland of Asthal: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 1 to 4. For the convenience of the House, I should like to move Amendments Nos. 1 to 4 en bloc and speak also to Amendments Nos. 14 to 22. All 12 amendments are designed to bring the Bill into line with the Land Registration Act 2002 which, as noble Lords know, received Royal Assent on 26th February last.
	Registration by the Land Registry is an essential part of the process of setting up a commonhold and the Bill makes certain provisions to allow that process to be carried through effectively. At the time of drafting, the operative legislation was the Land Registration Act 1925. By the time that this Bill comes to be implemented, the operative legislation will be the 2002 Act and so, as we signalled before the Bill left this House to go to the other place, we brought forward the necessary amendments there.
	I turn to Amendment No. 1. Although an amendment was necessary to Clause 3(1)(d) to bring the Bill into line with the 2002 Act, Amendment No. 1 goes further than is required simply for that purpose. Clause 3(1)(d) provides that one of the consents required before land can be registered as commonhold is that of a person who is registered as a cautioner of the whole or part of the land. We signalled before the Bill left your Lordships' House that we would be tabling an amendment to remove mention of cautioners from the list of persons who must consent to registration of land as commonhold. Amendment No. 1 does this by removing from the Bill sub-paragraph (d) from subsection (1) of Clause 3.
	There are two reasons for doing this. First, it would simplify the consent required on the face of the Bill because a class of interests would be removed from the blanket protection of the consent requirement and, so far as may be necessary, would be dealt with under Clause 3(1)(e).
	Secondly, it will give room to manoeuvre to take the provisions of the new scheme in the Land Registration Act 2002 into consideration. The Land Registration Act makes changes to the scheme of protection of interests on the register which makes the reference to "a cautioner" in Clause 3(1)(d) of the Commonhold and Leasehold Reform Bill no longer effective or appropriate. Under the Land Registration Act 2002 it is still possible to enter cautions against first registration and transitional arrangements so that existing entries on the register are retained. However, it will no longer be possible to enter cautions against dealings on the register.
	Instead, under the Land Registration Act, cautions against dealings will, for the most part, be replaced by "unilateral notices". Some types of interest that are presently protected by a caution in future will be protected by a restriction. Some interests may be able to be protected both by a notice and a restriction under the new regime: the notice to protect the priority of the interest and the restriction to ensure that certain procedural requirements of the interest are complied with.
	The policy behind the inclusion of cautioners, as opposed to any other interest holder, in Clause 3(1)(d) was not based on a need for additional protection for cautioners, but rather on the fact that a caution is regarded as being a "hostile" entry on the register, and is subject to the warning-off procedure. Including a requirement for the consent of cautioners in Clause 3 effectively brought forward to the pre-application stage any dispute under the warning-off procedure that might otherwise delay the registration of the land. Bringing potential disputes to the fore at an early stage was felt to contribute to streamlining, which we considered sufficiently necessary so as to include it on the face of the Bill.
	We want to continue with this policy of early discovery of potential disputes. We shall also need to consider whether provision for consent by holders of interests which were protected by entering a caution is necessary. Further consideration will need to be given as to whether, and if so what, consent provisions are required for beneficiaries of notices and restrictions as defined in the Land Registration Act 2002 who would not previously have been cautioners under the Land Registration Act 1925. Further work needs to be done on this area in conjunction with the implementation of the Land Registration Act 2002. Therefore, in order to deal with this range of interests, the Government would rely on the power as it stands in Clause 3(1)(e) to prescribe other classes of persons whose consent should be required.
	As to Amendments Nos. 2 to 4, each amendment seeks to amend Clause 6 of the Bill, which deals with registration in error. Clause 6(2) refers to Section 82(1) of the Land Registration Act 1925, which deals with rectification. It does so in order to exclude the possibility of the register being rectified under Section 82(1) in the specific circumstance of errors in the process leading up to a commonhold registration and to create a specific procedure in respect of commonhold matters.
	The Land Registration Act 2002 provides for a more limited scheme of rectification in Section 65 and Schedule 4 than was the case under Section 82(2) of the 1925 Act. However, although rectification is still possible under the new Act, the term "rectification" is more limited in scope in the new scheme than it had been in the 1925 Act. The process of "alteration" in the 2002 Act more nearly approximates to the 1925 Act's use of "rectification", and this amendment is simply necessary to correct the reference in Clause 6(2) so that it refers to "alteration" rather than to "rectification".
	As to Amendment No. 3, in listing various courses of action which a court may take when making an order under Clause 6, the Bill, at Clause 6(6)(b), currently provides that the court may order the rectification of the register. For the reasons that I have already given, Amendment No. 3 seeks to substitute the word "alteration" for "rectification".
	As to Amendment No. 4, Clause 6(6)(g) refers to Sections 83 and 84 of the Land Registration Act 1925, concerning provisions in respect of indemnity. This indemnity scheme is to be replaced by an amended scheme contained in Section 102 of and Schedule 8 to the Land Registration Act 2002. As Clause 6(6)(g) confers a power to apply, disapply or modify, in a specific commonhold context, a provision of the indemnity scheme, the amendment simply seeks to correct the reference so that it refers to Schedule 8 to the Land Registration Act 2002.
	Each of Amendments Nos. 14 to 19 seeks to amend Clause 63 of the Bill, which makes provisions in regard to registration procedure. Clause 63 empowers the Lord Chancellor to make rules about registration specifically in relation to commonhold land. In making provision about how these rules are to be made, what they may cover and how they are to have effect, Clause 63(2) relies on references to Section 144 of the Land Registration Act 1925. The appropriate reference is now to the "land registration rules" within the meaning of the Land Registration Act 2002, as Section 130(1) of the Land Registration Act defines "land registration rules" as any rules to be made under the 2002 Act. Amendments Nos. 15 and 16 simply reflect, in their respective places, the change brought about by Amendment No. 14.
	Clause 63(3)(b) provides that commonhold registration rules may make provision for disapplying Section 64 of the Land Registration Act 1925 in certain circumstances, and Section 64 dealt with the production of certificates. It is not directly replaced on the face of the 2002 Act; rather paragraph 4 of Schedule 10 to the 2002 Act provides a power to make provision about the production of certificates. The disapplication of general rules for certain circumstances can be done under that power without the need for specific provision to that effect on the face of the Bill as Section 128(1) of the Land Registration Act allows "different provision for different cases" to be made by land registration rules. Therefore, Clause 63(3)(b) is no longer necessary and Amendment No. 17 seeks to remove it.
	Amendment No. 18 simply seeks to change the reference to the power to charge registration fees in the Bill from Section 145 of the 1925 Act to Section 102 of the 2002 Act. Clause 63(5) of the Bill requires a commonhold registration document to be accompanied by such fee as specified by order under Section 145 of the Land Registration Act 1925. Section 145 is replaced by Section 102 of the 2002 Act for all relevant purposes. Therefore Amendment No. 18 seeks to replace the reference to Section 145 of the 1925 Act with one to Section 102 of the 2002 Act.
	As regards Amendment No. 19, Clause 63(6) of the Bill currently defines "commonhold registration document" and "general registration document", and does so for the latter by referring to a document sent to the registrar under a provision of the Land Registration Act 1925. Amendment No. 19 seeks to correct this to a reference to a document sent to the registrar under the Land Registration Act 2002.
	Amendment No. 20 seeks simply to replace the definition of the term "register" in Clause 65 with the appropriate reference to the 2002 Act. Amendment No. 21 seeks to remove Clause 65(6). The clause provides for an insertion in the 1925 Act after Section 126(4). That subsection made provision for the expenses of the registrar, principally salaries of staff, to be provided out of money given by Parliament. Clause 65(6) as it stands extends the scope of that provision so that expenses relating to commonhold registration functions can be similarly provided. Provision of the registrar's expenses out of money given by Parliament is no longer appropriate given the Land Registry's trading fund status and the Land Registration Act 2002 does not reproduce Section 126 or make provision in the same way. Land Registry expenses will be met in a different way and the provision to be inserted by subsection (6) is therefore no longer required.
	As to Amendment No. 22, Clause 67(3) provides for any provision of the 1925 Act which defines an expression within that Act to apply to the use of that expression in Part 1 of the Bill unless the contrary intention appears. That reference to the 1925 Act should now to be to the Land Registration Act 2002 and Amendment No. 22 seeks to achieve this.
	Moved, That the House do agree with the Commons in their Amendments Nos. 1 to 4.—(Baroness Scotland of Asthal.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

5 Clause 20, page 10, line 4, leave out "other than a term of years absolute" and insert "of a prescribed kind"
	6 Page 10, line 5, leave out "the whole or part of"
	7 After Clause 20 insert the following new Clause—
	"Part-unit: interests
	(1) It shall not be possible to create an interest in part only of a commonhold unit.
	(2) But subsection (1) shall not prevent—
	(a) the creation of a term of years absolute in part only of a residential commonhold unit where the term satisfies prescribed conditions,
	(b) the creation of a term of years absolute in part only of a non-residential commonhold unit, or
	(c) the transfer of the freehold estate in part only of a commonhold unit where the commonhold association consents in writing to the transfer.
	(3) An instrument or agreement shall be of no effect to the extent that it purports to create an interest in contravention of subsection (1).
	(4) Subsection (5) applies where—
	(a) land becomes commonhold land or is added to a commonhold unit, and
	(b) immediately before that event there is an interest in the land which could not be created after that event by reason of subsection (1).
	(5) The interest shall be extinguished by virtue of this subsection to the extent that it could not be created by reason of subsection (1).
	(6) Section 17(2) and (4) shall apply (with any necessary modifications) in relation to subsection (2)(a) and (b) above.
	(7) Where part only of a unit is held under a lease, regulations may modify the application of a provision which—
	(a) is made by or by virtue of this Part, and
	(b) applies to a unit-holder or a tenant or both.
	(8) Section 20(4) shall apply in relation to subsection (2)(c) above.
	(9) Where the freehold interest in part only of a commonhold unit is transferred, the part transferred—
	(a) becomes a new commonhold unit by virtue of this subsection, or
	(b) in a case where the request for consent under subsection (2)(c) states that this paragraph is to apply, becomes part of a commonhold unit specified in the request.
	(10) Regulations may make provision, or may require a commonhold community statement to make provision, about—
	(a) registration of units created by virtue of subsection (9);
	(b) the adaptation of provision made by or by virtue of this Part or by or by virtue of a commonhold community statement to a case where units are created or modified by virtue of subsection (9)."
	8 Insert the following new clause—
	"Part-unit: charging
	(1) It shall not be possible to create a charge over part only of an interest in a commonhold unit.
	(2) An instrument or agreement shall be of no effect to the extent that it purports to create a charge in contravention of subsection (1).
	(3) Subsection (4) applies where—
	(a) land becomes commonhold land or is added to a commonhold unit, and
	(b) immediately before that event there is a charge over the land which could not be created after that event by reason of subsection (1).
	(4) The charge shall be extinguished by virtue of this subsection to the extent that it could not be created by reason of subsection (1)."
	9 Clause 21, leave out Clause 21
	10 Clause 31, page 15, line 3, after "20," insert "(Part-unit: interests),"
	11 Clause 59, page 28, line 19, leave out subsection (3) and insert—
	"(3) The requirement of consent under section (Part-unit: interests)(2)(c) shall not apply to transfer to a compulsory purchaser."

Baroness Scotland of Asthal: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 5 to 11 en bloc. Again, these are technical amendments.
	Clause 20 of the Bill deals with the creation of interests and charges in commonhold units. Clause 20(3) provides that it is not possible to create an interest in a commonhold unit (other than a lease) unless the commonhold association is party to the creation of the interest or consents in writing.
	The policy behind the restriction on the creation of interests in units was to prevent unit-holders creating easements and profits à prendre out of their units or any other interests which might cause nuisance or annoyance to other unit-holders, or otherwise cause problems for the commonhold association as a whole. For this reason, the Bill currently provides that the creation of interests in units has to be approved by the commonhold association. In this way, the assessment of what interests in units are likely to cause problems and should not be permitted to be created should be left to the commonhold association.
	However, following the Committee stage of the Bill in another place, it was suggested to us by one of our consultees that we might inadvertently have excluded the possibility of a unit-holder creating an express trust of land without first gaining the consent of the commonhold association. It was not our intention to require the commonhold association to consent to such day-to-day innocuous and commonplace transactions as this and we now no longer believe that it is necessary to cast such a wide net on the face of the Bill to catch any potentially problematical interests.
	The new amendment, if accepted, means that Clause 20(3) will read,
	"It shall not be possible to create an interest of a prescribed kind in a commonhold unit unless the commonhold association is a party to the interest, or consents in writing to the creation of the interest".
	Following consultation, regulations will then prescribe the interests to which the clause applies.
	Amendment No. 6 removes reference to the creation of interests in part-units, consequential on the changes brought about by new Clause 21. The amended Clause 20(3) will relate only to the rules to be followed to create an interest in a whole commonhold unit. New Clause 21 will deal with interests in part-units. The creation of interests in part-units will be prohibited—except in the circumstances specified by new Clause 21(2)—by new Clause 21(1).
	New Clause 21 is the pivotal amendment in a group of amendments dealing with the rules in the Bill which govern transactions involving part-units. Noble Lords will remember the history of these amendments, which follow through debates at earlier stages in this House.
	The amendments have as their starting-point the policy that the transfer of part-units, which will inevitably involve change to boundaries, and possibly to the number of units, should be possible only as part of a comprehensive process involving the amendment, in parallel with the transfer, of the commonhold community statement, with an appropriate level of agreement from the commonhold association's members to the necessary amendment.
	It has always been the intention that the practical effect of transfer of ownership of part of a unit should be possible by way of amendment of the commonhold community statement. This can be seen in Clauses 22 and 23, which require certain consents to be obtained where the size of a unit is changed. Amendment of the commonhold community statement in parallel with the transfer prevents the problems which would be caused by unilateral, unregulated dealings with part-units which would result in the pattern of ownership and boundaries of units changing without the necessary amendments to ensure that the rights and responsibilities of the unit-holders are enforceable with regard to the new position.
	At Report stage in this House on 10th April 2001, we made amendments to Clauses 20 and 21 of the Bill. The amendments were intended first to ensure that the commonhold association did not have to consent to the creation of leases in units or part-units. This is in keeping with the unit-holder's freedom of disposition as a freeholder. Secondly, we wanted to allow the creation of interests in part-units subject to regulations to be made under subsections (3) and (4) of Clause 22.
	Following that amendment, as part of our ongoing process of consultation it fell to be considered whether, in amending Clauses 20 and 21 to enable the creation of interests in part-units, we might have opened up the possibility of the transfer of part-units with the consent of the commonhold association under Clause 20(3) but without ensuring the crucial concomitant amendment of the commonhold community statement. While this could be dealt with by regulations under Clause 21, we feel that it is preferable in this instance to ensure that the essential policy regarding the procedure to be followed to effect the transfer of part-units is more clearly reflected on the face of the Bill, with the finer technical detail reserved for regulations.
	Under Clauses 20 and 21 as they stand, if a unit-holder purported to transfer part of a unit and an interest in the part-unit was created as a result of the transfer, as long as the unit-holder could secure the consent of the commonhold association (under subsections (3) and (4) of Clause 20) the transfer might be effective without modification of the commonhold community statement.
	Of course, it would not be prudent for the commonhold association to agree to the transfer of part of a unit without making the necessary changes to the commonhold community statement. It would certainly make the task of managing the commonhold a good deal more difficult. It would similarly be unwise for a unit-holder to transfer part of his unit to another without, for example, securing agreement to a corresponding change in the percentages of commonhold assessment fixed for the respective units. That does not mean to say that it would not happen and the amendments to Clause 20 and the insertion of new Clause 21 are designed to ensure that it does not by making it clear that transfer of part-units should be impossible except in the circumstances specified in Clause 21.
	To this end, new Clause 21(1) provides that the creation of interests in part-units is not possible, and is bolstered by subsection (3), which provides that an attempt to create an interest in contravention of subsection (1) will have no effect. Paragraphs (a) and (b) of subsection (2) make the exception to subsection (1) for the creation of leases in part-units which, by virtue of subsection (6), is made subject to the regulations on residential leases to be created under Clause 17. Subsection (7) provides that regulations may modify the application of provisions of the Bill relating to the unit-holder or tenant where part of the unit is held under a lease so that wrinkles in day-to-day operation can be ironed out.
	As to transfers of part-units, subsections (2)(c) and (8) provide that transfer of the freehold estate in part of a commonhold unit is possible where the commonhold association consents in writing, but that the commonhold association will only be able to consent to the transfer following a resolution with 75 per cent of those members voting in favour, as is the case under Clause 20(4).
	I propose to go on to deal with subsections (9) and (10), but perhaps I may ask the House whether there will be any disagreement on the amendments. I can deal with them one by one, but it may be that the House does not need to be so troubled. I see everyone nodding. Therefore, can I take it that there is agreement in relation to all the amendments? In that case, I shall not tire the House further.
	Moved, That the House do agree with the Commons in their Amendments Nos. 5 to 11 en bloc.—(Baroness Scotland of Asthal.)

Lord Williams of Elvel: My Lords, I have no reason to dispute the amendments which my noble friend has put forward very eloquently and in great detail. However, will she accept that we are going through passages of the Bill which were not properly drafted in this House and have been redrafted as a result of changes by the revising Chamber, in this case another place? Will she also accept that, under the Bill as presently drafted, commonhold will not work? Will she then answer a question about Clause 172? When do the Government propose that Part 1 of this legislation should commence?

Baroness Scotland of Asthal: My Lords, legislation works best when this House and another place do their work diligently with energy and direction. That is what has happened with this Bill. We work best when we work together. The two Houses have demonstrated a high degree of acumen and dedication on the Bill.
	I do not accept that the scheme of commonhold and leasehold will not work. We have spent a great deal of time making sure that it is technically as perfect as we can make it. The consultation process has ensured that practitioners and those who have to implement the Bill will take all those matters fully into consideration. When concluded, this will be one of the finest Bills to go through both Houses. All those on all sides in both Houses who have participated in the debates on the Bill should be proud of the innovations that we will have brought into being after a period of more than 77 years. There are many who rejoice in the Bill and I am not ashamed to say that I count myself among them.
	Commencement, the last issue, is not less than 12 months after Royal Assent.

Baroness Gardner of Parkes: My Lords, as the Minister knows, I am keen on the idea of commonhold. I was delighted to meet someone who is redeveloping a derelict mews who seemed interested in the idea. However, he asked me how on earth an ordinary small developer such as him would know about it. Will a simple guide be available so that it is not a nightmare for people to assess how to implement the proposals?

Baroness Scotland of Asthal: My Lords, I am pleased that there are people ready to celebrate. When I was in the Caribbean doing the Lord Chancellor's business, I was amazed that a number of people approached me about the Bill and told me how anxious they were about the coming into force of the enfranchised leasehold provisions and the commonhold provisions. I join the noble Baroness in that regard.
	Of course we shall take account of the need for guidance. The noble Baroness will know that the Legal Services Commission, through the Community Legal Service partnership, has issued a number of documents in relation to housing. Once the Bill is passed, this may be a proper subject for another such leaflet to let people know how the scheme is supposed to work in practice.

On Question, Motion agreed to.

COMMONS AMENDMENT

12 After Clause 60, insert the following new clause—
	"Advice
	(1) The Lord Chancellor may give financial assistance to a person in relation to the provision by that person of general advice about an aspect of the law of commonhold land, so far as relating to residential matters.
	(2) Financial assistance under this section may be given in such form and on such terms as the Lord Chancellor thinks appropriate.
	(3) The terms may, in particular, require repayment in specified circumstances."
	13 Clause 62, page 29, line 15, leave out from beginning to "by" in line 17

Baroness Scotland of Asthal: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 12 and 13.
	Amendment No. 12 introduces a new clause to allow the Lord Chancellor to fund the provision of advice on commonhold. Amendment No. 75 removes paragraph 9 of Schedule 5. There are also consequential amendments. Amendment No. 13 replaces a joint regulation-making power in Clause 62 relating to compulsory purchase powers with a power for the Lord Chancellor to act alone. Amendment No. 23 adds an entry for residential commonhold units to Clause 68. If those amendments are uncontentious, I shall say no more.
	Moved, That the House do agree with the Commons in their Amendments Nos. 12 and 13.—(Baroness Scotland of Asthal.)

The Earl of Caithness: My Lords, how much money has the Lord Chancellor set aside to help these people? Is the intention to help individuals or to help, for example, the RICS to pass on advice to its members?

Baroness Scotland of Asthal: My Lords, I am not able to say precisely how much money is set aside. I shall write to the noble Earl on the two matters that he has raised, because I am not able to give him precise details at the moment, although I am sure that I would be able to give him an answer if I stayed on my feet long enough.

On Question, Motion agreed to.

COMMONS AMENDMENTS

14 Clause 63, page 29, line 32, leave out from "as" to end of line 34 and insert "land registration rules within the meaning of the Land Registration Act 2002,"
	15 Page 29, line 36, leave out "rules under section 144" and insert "land registration rules"
	16 Page 29, line 37, leave out "rules under section 144" and insert "land registration rules"
	17 Page 30, line 2, leave out paragraph (b)
	18 Page 30, line 24, leave out "145 of the Land Registration Act 1925 (c. 21)" and insert "102 of the Land Registration Act 2002"
	19 Page 30, line 30, leave out "1925" and insert "2002"
	20 Clause 65, page 30, line 45, leave out "1925" and insert "2002"
	21 Page 31, line 12, leave out subsection (6)
	22 Clause 67, page 31, line 30, leave out from "(c. 20)," to "defining" in line 31 and insert "the Companies Act 1985 or the Land Registration Act 2002"
	23 Clause 68, page 32, line 23, at end insert—
	"Residential commonhold unit Section 17"

Baroness Scotland of Asthal: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 14 to 23.
	Moved, That the House do agree with the Commons in their Amendments Nos. 14 to 23.—(Baroness Scotland of Asthal.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

24 Clause 78, page 38, line 41, leave out "one month" and insert "three months"
	25 Clause 88, page 44, line 22, leave out "one month" and insert "three months"
	26 Page 44, line 25, leave out "one month" and insert "three months"
	27 Clause 91, page 47, line 9, leave out from first "date" to end of line 10
	28 Clause 92, page 47, line 34, leave out from beginning to "must" in line 37 and insert "The duty imposed by this section"
	29 Clause 96, page 49, line 8, at end insert "; but nothing in this section or section 97 applies in relation to an approval concerning only a part of the premises consisting of a flat or other unit not held under a lease by a qualifying tenant."
	30 Page 49, line 37, at end insert "; and an approval required to be obtained by virtue of a restriction entered on the register of title kept by the Chief Land Registrar is, so far as relating to a long lease of the whole or any part of any premises, to be treated for the purposes of this Chapter as an approval under the lease."
	31 Clause 100, page 51, line 18, after "leases" insert "(including enactments contained in this Act or any Act passed after this Act)"
	32 Clause 109, page 55, line 6, at end insert "or"
	33 Page 55, line 10, leave out from "rent)" to end of line 12

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 24 to 33.
	The amendments deal with various aspects of the right to manage. Amendments Nos. 24 to 28 increase from one month to three months the period that elapses between a determination that the right-to-manage company is entitled to exercise the right to manage and the acquisition of that right. Noble Lords will no doubt recall the discussion about that in this Chamber. I gave an undertaking on Report that we would consult. The procedures as originally drafted would have allowed leaseholders to take over the management of their block without necessarily having all the supporting information and access to funds. Concerns have been expressed about that. After consulting interested parties and listening to their concerns, we have brought forward these amendments, the critical aspect of which is the extension from one month to three months.
	The aim of Amendment No. 29 is to clarify the existing provisions relating to approvals once the right to manage has been exercised. Concerns have been expressed that under the current drafting it could be argued that the RTM company would have functions relating to approvals in relation to commercial tenancies under Clauses 96 and 97. That has never been our intention. This technical amendment is intended to ensure that the right-to-manage company only has functions relating to approvals for premises held under a long residential lease by a qualifying tenant.
	Amendment No. 30 is another technical amendment that will prevent an anomaly highlighted by the Land Registry in the approvals regime. Amendment No. 31 is a technical amendment that makes it clear that the power in Clause 100(2) applies to subsequent Acts of Parliament and to the provisions in the Bill. Amendments Nos. 32 and 33 are technical amendments that will remove an inconsistency in Clause 109, which, as noble Lords will all know, deals with notices in relation to the right to manage.
	I have gone through the amendments after Amendment No. 28 quite cursorily, but I shall be happy to answer any questions.
	Moved, That the House do agree with the Commons in their Amendments Nos. 24 to 33.—(Lord Falconer of Thoroton.)

The Earl of Caithness: My Lords, I thank the Government for carrying out a consultation exercise, which has led to a slight change of heart. The noble and learned Lord will be aware that this part of the Bill is not as welcomed as the noble Baroness, Lady Scotland, thinks the first part of the Bill is welcomed throughout the country. I am rather surprised that the noble and learned Lord has brought it forward. On 27th February, in a debate initiated by the noble Lord, Lord Best, the noble and learned Lord said:
	"The lower the political risk in relation to the private rented sector, the more a landscape will be created for investment by both smaller landlords and institutional investors. The private rented sector is sensitive to changes in regulation".
	He went on:
	"the Government have no intention of changing the regulatory framework covering the private rented sector".—[Official Report, 27/2/02; cols. 1473-74.]
	However, the Bill does that. The noble and learned Lord knows that most people in the rented sector are unhappy with the Bill. I received briefings yesterday from two sources, both of which said that there would be a need for further legislation. The Bill is rather contrary to what people outside think is going to happen.

Lord Falconer of Thoroton: My Lords, the noble Earl has effectively again raised the issue of various aspects of the Bill about which there has been debate. I do not complain about that, but it is not quite germane to the specific detailed proposals which I am proposing in this group of Commons amendments. I do not believe that there is any inconsistency between what I said in that debate on the private rented sector and this Bill—which is effectively and primarily all about long leasehold arrangements. I believe it was clear to everyone in that debate that the Commonhold and Leasehold Reform Bill was being considered by Parliament and that we were talking about what people would understand as the shorter-term rental sector. That is what that debate was about.

On Question, Motion agreed to.

COMMONS AMENDMENT

34 Clause 114, page 58, line 17, at end insert—
	"(2)In section 69(1)(b) of the 1993 Act (estate management schemes), for "by virtue of the amendments of that Chapter made by paragraph 3 of Schedule 9 to the Housing Act 1996 (c. 52)" substitute "in circumstances in which, but for section 114(1) of the Commonhold and Leasehold Reform Act 2002 and the repeal by that Act of paragraph 3 of Schedule 9 to the Housing Act 1996 (c. 52), they would have been entitled to acquire it by virtue of the amendments of that Chapter made by that paragraph"."

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 34. With your Lordships' leave, I shall also speak to Amendment No. 60.
	Noble Lords will no doubt recall that during previous debates on this Bill, primarily in response to issues raised by the noble Baroness, Lady Gardner of Parkes, I gave an undertaking that the Government would bring forward an amendment on estate management schemes if possible. That is what we have done in this group of amendments.
	Since estate management schemes were first permitted under the Leasehold Reform Act 1967, Parliament has legislated to provide protection for tenants in respect of service charge payments. As noble Lords are aware, leaseholders who pay service charges have rights and safeguards to protect them against unreasonable charges. This Bill will improve and extend those rights and introduce similar rights in respect of administration charges made under a lease. Currently there are no such rights in respect of charges made under estate management schemes. At present, anyone who enfranchises and is subject to a scheme will lose the protection against unreasonable charges that they had under their lease. That seemed to us to be an anomaly.
	We have brought forward Amendment No. 60 in order to remedy that anomaly. It will provide that charges under estate management schemes should be payable only to the extent that they are reasonable and that the LVT has the power to determine the extent to which such charges are reasonable. They will also be able to determine whether a person subject to an estate management scheme is liable for such a charge.
	Amendment No. 34 is intended to ensure that it continues to be possible to request consent for the making of an application for the approval of an estate management scheme in connection with acquisitions under Chapter 1 of Part 1 of the 1993 Act. It has come to our attention that once Clause 114 of the Bill comes into force, we would be removing an existing right to make an application for an estate management scheme under section 69 of the Leasehold Reform, Housing and Urban Development Act 1993. That is not our intention, and the amendment will preserve that existing right. I am grateful to the noble Baroness, Lady Gardner of Parkes.
	Moved, That the House do agree with the Commons in their Amendment No. 34.—(Lord Falconer of Thoroton.)

Baroness Gardner of Parkes: My Lords, I thank the Minister for the amendment, which I think is a very good one to include in the Bill. It has been a very contentious issue, but he has been very supportive in helping to resolve it.
	Rather than hopping up as we reach each group of amendments, I should like to ask the Minister a couple of questions on later amendments now. We have discussed whether the Government have accidentally created a situation whereby head lessees are able to benefit greatly from the Bill to the disadvantage of leaseholders. There was great discussion on the issue when it was raised by, I think, the noble Earl, Lord Caithness. I am not sure whether any of the amendments address that issue.
	I also thank the Minister for Amendment No. 40, which is in the next group. It seems to be the amendment—if I have read it correctly—that will ensure that those who are in an estate management scheme are so informed prior to purchasing their freehold. However, I may have misunderstood him on that point and the issue may be addressed in another amendment. Nevertheless, I am most grateful that the estate management issues have been fully considered.

Lord Falconer of Thoroton: My Lords, I believe that the head lessee point is dealt with in Commons Amendment No. 44, to which I shall return. However, the summary which I have of Commons Amendment No. 40 states that it is,
	"a consequential amendment which changes the time at which the right-to-enfranchise company must notify the landlord of any side deal with persons other than participating members".
	So Amendment No. 40 does not seem to address that specific issue.

On Question, Motion agreed to.

COMMONS AMENDMENTS

35 Clause 119, page 60, line 21, after "notice" insert "to the company"
	36 Page 60, line 28, leave out from "if" to end of line 30 and insert "he has given a participation notice to the company within the period beginning with the date of the assignment and ending 28 days later (or, if earlier, on the execution of a relevant conveyance to the company)."
	37 Page 60, line 32, leave out from "if" to end of line 33 and insert "they have given a participation notice to the company at any time (before the execution of a relevant conveyance to the company)."
	38 Page 60, line 34, leave out second "a" and insert "the"
	39 Page 60, line 36, at end insert—
	"(7A) For the purposes of this section a participation notice given to the company during the period—
	(a) beginning with the date when the company gives a notice under section 13, and
	(b) ending immediately before a binding contract is entered into in pursuance of the notice under section 13, is of no effect unless a copy of the participation notice has been given during that period to the person who (in accordance with section 9) is the reversioner in respect of the premises."
	40 Clause 123, page 63, line 4, at end insert—"
	(2)In section 18(1) of the 1993 Act (duty to disclose existence of agreements affecting premises etc.), for "valuation date for the purposes of Schedule C, substitute "time when a binding contract is entered into in pursuance of the initial notice"."
	41 Clause 125, page 63, line 14, leave out from first "of" to end of line 16 and insert "the lease held by any of those participating members exceeds eighty years, any increase in the value of the freehold or any intermediate leasehold interest in the specified premises which is attributable to his potential ability to have a new lease granted to him as mentioned in sub-paragraph (2)(a) is to be ignored."
	42 Clause 128, page 63, line 31, leave out "1" and insert "2"
	43 Clause 129, page 64, line 14, leave out "one year" and insert "two years"

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 35 to 43. With the leave of the House, I shall also speak to Amendments Nos. 49 and 76.
	Amendments Nos. 35 to 40 and Amendment No. 76 are all consequential to the change to the valuation date for flats, as provided for in Clause 123 of the Bill. As noble Lords may recall from previous debates, under existing law, the valuation date for flats is the date on which the terms of acquisition are agreed or determined. The Bill would provide that, instead, the valuation date should be the date on which the right-to-enfranchise company serves its initial notice on the landlord. We have subsequently realised that this could have some unintended consequences, and these amendments are designed to rectify them.
	First, under the proposals currently in the Bill, it could be argued that where the price to be paid for the freehold includes marriage value, it should be calculated by reference to the number of participants at the time when the initial notice was served. That is plainly not what we had intended. Amendment No. 76 makes it clear that, although the property should be valued as at the date of the initial notice, the price to be paid will be based on the number of participants at the point when the landlord and the RTE company actually exchange contracts.
	We of course also have to ensure that the landlord knows how many participants there are at that stage. When the initial notice is served, the landlord will be told how many leaseholders are participating at that point. Amendment No. 39 will ensure that the landlord is sent a copy of any participation notices given to the RTE company after that point. Amendments Nos. 35 to 38 are consequential. Amendments Nos. 36 and 37 specify the time by which assignees and personal representatives have to give notice to participate.
	Secondly, existing law provides that the landlord must be notified of any agreements between the nominee purchaser and non-participating leaseholders which provide for the disposal of a relevant interest in relation to the enfranchisement. Amendment No. 40 would require the RTE company to notify the landlord of any such agreements entered into at any time before the exchange of contracts. I believe that that has nothing to do with estate management contracts.
	On Amendment No. 41, as noble Lords will be aware, the Bill generally provides for marriage value to be disregarded in cases where the unexpired term of a lease exceeds 80 years. Our policy aim is to prevent potentially expensive debate over sums which would be, in any event, de minimis. However, in the case of collective enfranchisement, the Bill provides that marriage value should be disregarded only if the unexpired terms of all the leases of flats held by participating members of the RTE company exceed 80 years.
	On reflection, we do not consider that this approach meets our policy objectives. We have decided, therefore, to provide that marriage value should be disregarded on any individual lease with more than 80 years left until its expiry. That is consistent with the approach taken for the individual rights of lease renewal and house enfranchisement, and would be a better way to meet our policy objective.
	Amendment No. 42 corrects a purely technical error in the Bill, correcting an incorrect reference to Chapter 1 of the 1993 Act, which should instead refer to Chapter 2. Amendments Nos. 43 and 49 extend the period in which personal representatives could exercise their rights.
	Moved, That the House do agree with the Commons in their Amendments Nos. 35 to 43.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

COMMONS AMENDMENT

44 Clause 135 , page 65, line 20, at end insert—
	"(IZB) Where a flat forming part of a house is let to a person who is a qualifying tenant of the flat for the purposes of Chapter 1 or 2 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993 (c. 28), a tenant of the house does not have any right under this Part of this Act unless, at the relevant time, he has been occupying the house, or any part of it, as his only or main residence (whether or not he has been using it for other purposes)—
	(a) for the last two years; or
	(b) for periods amounting to two years in the last ten years."
	45 Clause 137, page 66, line 19, leave out "(IZA)" and insert "(IZB)"
	46 Page 66, line 21, leave out "(IZB)" and insert "(IZC)"
	47 Page 66, line 44, leave out "(IZC)" and insert "(IZD)"
	48 Page 66, line 47, leave out "(IZB)" and insert "(IZC)"

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 44 to 48.
	Amendment No. 44 is intended to address concerns about the enfranchisement of head leases which were raised in this House when we previously discussed this issue. Noble Lords will no doubt recall that the noble Earl, Lord Caithness, tabled an amendment on Third Reading to try to address the issue of enfranchisement of head leases. At that time, my noble friend Lord McIntosh undertook to consider the matter further and to introduce an amendment if appropriate. I am pleased to say that this amendment will, we hope, deal with the noble Earl's concerns.
	Where there is a head lease of a building which can be regarded as a house, and parts of the building have been sublet on long leases, changes to the Bill would enable a non-resident head lessee, with possibly only a nominal interest in the building, to enfranchise the whole building under the 1967 Act. Such a head lessee would stand to make a windfall profit at the expense of the landlord if under-lessees subsequently collectively enfranchised or acquired new leases under the 1993 Act.
	The amendment provides that when part of a house is sublet to a person who is a qualifying tenant for the purposes of the 1993 Act, the house cannot be enfranchised under the 1967 Act unless the head lessee has occupied the house, or any part of it, for the past two years or for periods totalling two years in the past 10. That will prevent any opportunity for non-resident head lessees to enfranchise and make windfall gains from subsequent enfranchisement or lease renewal under the 1993 Act. It will retain the existing right for resident head lessees to enfranchise in these circumstances. Amendments Nos. 45 to 48 make consequential changes.
	Moved, That the House do agree with the Commons in their Amendments Nos. 44 to 48.—(Lord Falconer of Thoroton.)

The Earl of Caithness: My Lords, I am grateful to the noble and learned Lord for the amendment. It is certainly an improvement. Probably the best way of dealing with the matter was to go back to the residency test. I can assure the Minister that a number of overseas companies were rubbing their hands with glee at the thought of getting hold of some useful profit, but they are no longer doing so.

Baroness Gardner of Parkes: My Lords, I wonder whether I was confused because of the use of the word "house". I had thought when the noble Earl, Lord Caithness, raised the matter previously that we were concerned not only with individual houses, but with properties in general. I am concerned that the provision might apply to the head lessee of a major block of flats. Will the Minister assure me that that could not happen and that the head lessee of a block of flats would not have an automatic right to a long lease, an extension or the right to enfranchise? Is there no risk whatever of that and is that why the clause is restricted to a house only?

Lord Falconer of Thoroton: My Lords, my recollection is that the problem was raised by the noble Earl, Lord Caithness, in the context of a house. I shall write to the noble Baroness about that, or perhaps I shall be able to answer her question during the debate. I cannot answer it immediately in the categorical terms that the noble Baroness seeks.

Baroness Gardner of Parkes: My Lords, I thank the Minister. If I am right and there is a risk of a similar situation arising in a block of flats, what will happen after we have debated the Bill today? Is it too late to do anything about that?

Lord Falconer of Thoroton: My Lords, in this Bill the answer is almost certainly yes, but I should prefer to answer the question posed by the noble Baroness before we get into that difficulty.On Question, Motion agreed to.

COMMONS AMENDMENT

49 Clause 139, page 67, line 33, leave out "one year" and insert "two years"

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 49.
	Moved, That the House do agree with the Commons in their Amendment No. 49.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

COMMONS AMENDMENT

50 After Clause 141, insert the following new clause—
	"PREMISES INCLUDING RAILWAY TRACK
	In section 4 of the 1993 Act (premises in the case of which right does not apply) insert at the end—
	"(5) This Chapter does not apply to premises falling within section 3(1) if the freehold of the premises includes track of an operational railway; and for the purposes of this subsection—
	(a) "track" includes any land or other property comprising the permanent way of a railway (whether or not it is also used for other purposes) and includes any bridge, tunnel, culvert, retaining wall or other structure used for the support of, or otherwise in connection with, track,
	(b) "operational" means not disused, and
	(c) "railway" has the same meaning as in any provision of Part 1 of the Railways Act 1993 (c. 43) for the purposes of which that term is stated to have its wider meaning.""

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 50.
	Before discussing the amendment, I have news for the noble Baroness, Lady Gardner of Parkes, and it is probably better if I deal with it now. The note that I have states that a head lessee cannot enfranchise under the 1993 Act, so the problem does not arise in respect of flats. It only refers to houses. I hope that that gives the noble Baroness the assurance that she seeks.
	Turning to Amendment No. 50, we should like to make a minor amendment to it, which appears on the revised Marshalled List as Amendment No. 50B. The noble Lord, Lord Goodhart, has tabled Amendment No. 50A, which proposes that we disagree with the Commons amendment, so I shall deal with that in my speech.
	Amendment No. 50 is the result of representations made rather late in the day on behalf of Railtrack plc and London Underground Limited. They discovered a flaw in the existing provisions of the Leasehold Reform, Housing and Urban Development Act 1993. Under that Act it would be possible for leaseholders living in a block of flats which was built over a railway bridge or tunnel who wished to buy their freehold to acquire, under certain circumstances, the freehold of the actual track of the operational railway. Moreover, while landlords have the right to take out 999-year leases on the commercial parts of a building when leaseholders buy their freehold, there is reason to doubt whether the right of lease-back would apply to land over which a railway runs, given that such land does not form part of the block itself.
	Clearly, we need to amend the existing legislation. I think that all present would agree with the basic premise. We do not want people to start running railways as part of what they can do under this Bill or the 1993 Act. However, I know that the noble Lord, Lord Goodhart, would have preferred us to find a more sophisticated solution to the problem than that provided by a simple exemption, which is what the Commons amendment proposes in effect.
	When the shortcomings of the 1993 Act were first brought to our attention we considered whether we could adequately deal with them by amending the existing commercial lease-back provisions. However, that would have created its own problems. For example, railway bridges and rafts built over railway tracks have a limited life span and many of them will require replacement or refurbishment in the not too distant future. We understand that London Underground Limited and Railtrack are always careful to ensure that any leases that they grant on property built above bridges and rafts will expire before those bridges and rafts require replacement.
	If leaseholders subsequently extend their leases, Section 61 of the 1993 Act provides a process that can be used to terminate the lease at the time when it would have originally expired if it is necessary for redevelopment purposes. That would not be possible where leaseholders had enfranchised. Moreover, enfranchisement would ordinarily transfer responsibility for the maintenance of such a bridge or raft to the leaseholders. I do not need to spell out our reasons for considering that that would be undesirable. We should also have to define precisely what the freeholder would and would not have the right to lease back, which would not be straightforward.
	In view of those complications and in view of the relatively short time available to us to draft and table an amendment, we decided that it would be better to opt for a relatively straightforward exemption instead. As I said, however, it is not our intention to exempt property from the right to enfranchise merely because it happens to be built over a deep-bored tunnel.
	The amendment limits the exemption to premises where
	"the freehold of the premises includes track of an operational railway".
	The exemption does not apply merely because a block has been built over the railway. Where tunnels have been deep bored we would expect London Underground or any other railway infrastructure operator to have only acquired rights to the subsoil through which that tunnel ran. As a result we would expect those rights to be quite independent from ownership of the freehold of the surface of the land above the tunnel. Therefore, the freehold of a block of flats built over such a tunnel would not include the track of an operational railway.
	This is quite different from the situation which typically arises when property has been built on top of a bridge or over a tunnel built on a cut and cover basis. Here the railway will typically own the freehold of the land and will have leased the premises built over the operational railway to a third party, or directly to the leaseholders concerned. Therefore, an enfranchising group would become the owner of that part of the operational railway that fell beneath the block of flats as a result of the group's purchase of the freehold, which would clearly be undesirable.
	Amendment No. 50 is necessary to provide a solution to the deficiencies of the 1993 Act. It may be possible to devise a more sophisticated solution, given more time to do so, and I would not rule out the possibility of making a further amendment to the 1993 Act at a later date, although noble Lords will appreciate that I am not in a position to make any promises about that now. However, I am sure that your Lordships will agree that the defect in the 1993 Act merits immediate action. We cannot allow leaseholders to compulsorily purchase parts of an operational railway.
	Amendment No. 50B is a technical amendment. Amendment No. 50, as printed, would insert the new clause after Clause 141 of the Bill. That is an error; the new clause should be inserted after Clause 113. Amendment No. 50B would correct that error. I commend it to the House.

Lord Goodhart: rose to move, as an amendment to the Motion that the House do agree with the Commons in their amendment, leave out "agree" and insert "disagree".

Lord Goodhart: My Lords, Amendment No. 50 was introduced into the House of Commons on Report and has nothing in common with any of the other Commons amendments. I read that Report stage in Hansard and it is plain that it did not receive proper scrutiny in that place. Most of the debate was taken up by a speech by the Conservative Shadow Attorney-General who spoke for some four-and-a-half columns of Hansard and whose speech, frankly, appears to have been as irrelevant as it was long-winded.
	I wrote to the noble and learned Lord, Lord Falconer of Thoroton, before the Easter Recess. On 28th March I received a card saying that my letter was receiving attention. On 3rd April I received a further card saying that it was receiving attention and on 4th April I received three cards saying that it was receiving further attention. So it is quite clear that the noble and learned Lord's department has given my letter a good deal of attention.
	There has been no opportunity for discussion of this amendment, but I was grateful for advance sight of the speaking notes prepared for the Minister. I see that serious problems arise. The first problem I raised was the fact that this amendment had been put in the wrong chapter of Part 2 of the Bill. That has now been dealt with and I am happy that Amendment No. 50B now appears in its right place.
	However, I also had problems with the substance of the amendment, though what the noble and learned Lord said has given me some comfort in that regard. The effect of the amendment is to exclude what might be described as "railway property" from the right of collective enfranchisement. That does not simply apply to rights of collective enfranchisement which arise under this Bill. The effect of this amendment will be to remove existing rights of collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993, though as far as I am aware no attempt has been made up until now to exercise any of those rights. However, the fact that we are taking away existing rights means that this requires further scrutiny.
	The amendment removes the right of collective enfranchisement where "the premises" includes the track of the railway. In general "premises" includes not only a building, but the land beneath the building if it is in the same freehold ownership of the building itself as would normally be the case. "Track", of course, in this case expressly includes tunnels.
	I am concerned with the situation in London. As the noble and learned Lord said, there are two types of tunnel; one is cut and cover and the other deep bored. I happen to live near Baker Street station. I say immediately that I do not have any personal interest to declare on this matter; my flat is not enfranchisable anyway. But Baker Street station is provided with both kinds of tunnel and there are certainly two or three large blocks of flats which are above the station or the station approaches and which will therefore be affected by this amendment.
	I can see the problems with the cut and cover lines, where the lessees will not want to be saddled with the ownership of the railway track and tunnel, and the track authority will of course need access for maintenance and reconstruction. But it is unfair that a group of leaseholders should be excluded from the right of collective enfranchisement unless it is absolutely necessary. Given time, it should not be impossible to come up with a solution which would give leaseholders the right to collective enfranchisement subject to some restrictions, and would give track authorities access to the track and tunnels which they need. No problems in fact seem to have arisen since 1993 and I cannot imagine that any leaseholder would want to enfranchise if they would be saddled with the track ownership, so Amendment No. 50 is unnecessary.
	Deep bored tunnels are another matter. There is no interaction between the block and the surface and the tunnel beneath in general. In London there are many blocks which must have been erected above deep-bored tunnels where the leaseholders do not know, or normally care, whether or not they are above a tunnel except perhaps from hearing the occasional rumble coming from far down below.
	As I say, "premises" would normally include the ground under the building if it is in the same ownership. But if the railway authority owns the freehold of the tunnel as distinct from the ownership of the land above and around the tunnel, then the tunnel is not part of the premises and there would be no problem with collective enfranchisement. I agree with the Minister that that is likely to be so in the case of many blocks. Indeed, I noted that under the Transport and Works (Model Clauses for Railways and Tramways) Order 1992, a railway authority in fact is only allowed to acquire the subsoil if the works are to be carried out at a depth of more than nine metres below the surface. But of course model clauses may not always apply; the rules may have been different in past times; and there may be problems in some cases.
	Have the Government any idea how many blocks of flats are in fact affected by this amendment? How many are above cut and cover tunnels and how many above deep bored tunnels? Has any consultation been carried out with leaseholders in blocks that might be affected? It is unfortunate that this significant amendment was introduced at short notice without proper investigation of the facts or consultation with the people affected. I beg to move.
	Moved, as an amendment to the Motion that the House do agree with the Commons in their amendment, leave out "agree" and insert "disagree".—(Lord Goodhart.)

The Earl of Caithness: My Lords, can the noble and learned Lord say whether there is any problem in regard to roads? If there is a cut and cover tunnel under a road—I was thinking of Hatfield where they have certainly built on cut and cover tunnels—will problems arise? My mind then turned to developments over canals which may be affected. Is this just the opening of a Pandora's Box which needs more attention, as the noble Lord, Lord Goodhart, said?

Lord Falconer of Thoroton: My Lords, first, dealing with the points raised by the noble Lord, Lord Goodhart. We are grateful to him for his support for Amendment No. 50B. It was his letter that drew attention to the wrong placing in the Bill.
	Subject to one matter, I do not believe that our legal or factual analysis differs. That one point of disagreement is that the noble Lord, Lord Goodhart, said that the problem that impliedly exists in the 1993 Act—that rightly identifies where the problem lies—has not yet caused any difficulty. Therefore he says that there is no need to make this amendment. The obverse of that is that by making this amendment we will avoid the right to enfranchised or managed companies getting control of the operational railway. The noble Lord acknowledges that that is the real problem. It has not yet arisen as a difficulty and therefore making it clear that that will not be allowed to happen equally will not cause any difficulty.
	We are both on slightly uncharted territory because any conclusion can be drawn, in the face of the fact that the problem has not yet caused any difficulty, as to what is the right course. I am sure everybody in the House will agree that we need to have a situation where leaseholders do not end up having control over the operational railway; any other course is not sensible. This is the most effective way of dealing with it.
	The noble Lord, Lord, Lord Goodhart, did not put forward any other alternative way of dealing with the issue. We believe that we have taken the right course. As regards the questions from the noble Earl, having given the opportunity, we have received no representations from either road or canal bodies that a problem is caused to them whereas we have received representations, which we have considered, in relation to Railtrack and London Underground. We have investigated them. I cannot give answers to the questions about how many blocks of flats are on top of cut and cover tunnels and how many are on top of deep-bore tunnels. But as the noble Lord said, we can see that there are some above cut and cover tunnels, but I am unable to say what is the scale of the problem. We believe that we have taken the right and sensible course, but we shall obviously keep the matter under review.

Lord Goodhart: My Lords, I am grateful to the noble and learned Lord for what he said. I take some comfort from what was not an undertaking on his part, but he said that his department would consider whether it might look at this matter again with a view to introducing legislation next time we have another leasehold Bill to enable leaseholders in railway flats, if I may call them that, to have the right of enfranchisement or something equivalent to it. Having said that, this is obviously not a matter on which I would wish to divide the House. I beg leave to withdraw my amendment.

Amendment No. 50A, as an amendment to the Motion, by leave withdrawn.

Lord Falconer of Thoroton: rose to move, as an amendment to the Motion that the House do agree with the Commons in their amendment, at the end insert "and do propose the following consequential amendment to the Bill—
	Transpose new Clause (Premises including railway track) from after Clause 141 to after Clause 113."

Lord Falconer of Thoroton: My Lords, I spoke to this amendment earlier.
	Moved, as an amendment to the Motion that the House do agree with the Commons in their amendment, at the end insert "and do propose the following consequential amendment to the Bill—
	Transpose new Clause (Premises including railway track) from after Clause 141 to after Clause 113.".—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

51 After Clause 147, insert the following new Clause—
	"Consultation about service charges
	For section 20 of the 1985 Act (limitation of service charges: estimates and consultation) substitute—
	"20 Limitation of service charges: consultation requirements
	(1) Where this section applies to any qualifying works or qualifying long term agreement, the relevant contributions of tenants are limited in accordance with subsection (6) or (7) (or both) unless the consultation requirements have been either—
	(a) complied with in relation to the works or agreement, or
	(b) dispensed with in relation to the works or agreement by (or on appeal from) a leasehold valuation tribunal.
	(2) In this section "relevant contribution", in relation to a tenant and any works or agreement, is the amount which he may be required under the terms of his lease to contribute (by the payment of service charges) to relevant costs incurred on carrying out the works or under the agreement.
	(3) This section applies to qualifying works if relevant costs incurred on carrying out the works exceed an appropriate amount.
	(4) The Secretary of State may by regulations provide that this section applies to a qualifying long term agreement-
	(a) if relevant costs incurred under the agreement exceed an appropriate amount, or
	(b) if relevant costs incurred under the agreement during a period prescribed by the regulations exceed an appropriate amount.
	(5) An appropriate amount is an amount set by regulations made by the Secretary of State; and the regulations may make provision for either or both of the following to be an appropriate amount—
	(a) an amount prescribed by, or determined in accordance with, the regulations, and
	(b) an amount which results in the relevant contribution of any one or more tenants being an amount prescribed by, or determined in accordance with, the regulations.
	(6) Where an appropriate amount is set by virtue of paragraph (a) of subsection (5), the amount of the relevant costs incurred on carrying out the works or under the agreement which may be taken into account in determining the relevant contributions of tenants is limited to the appropriate amount.
	(7) Where an appropriate amount is set by virtue of paragraph (b) of that subsection, the amount of the relevant contribution of the tenant, or each of the tenants, whose relevant contribution would otherwise exceed the amount prescribed by, or determined in accordance with, the regulations is limited to the amount so prescribed or determined.
	20ZA Consultation requirements: supplementary
	(1) Where an application is made to a leasehold valuation tribunal for a determination to dispense with all or any of the consultation requirements in relation to any qualifying works or qualifying long term agreement, the tribunal may make the determination if satisfied that it is reasonable to dispense with the requirements.
	(2) In section 20 and this section—
	"qualifying works" means works on a building or any other premises, and
	"qualifying long term agreement" means (subject to subsection (3)) an agreement entered into, by or on behalf of the landlord or a superior landlord, for a term of more than twelve months.
	(3) The Secretary of State may by regulations provide that an agreement is not a qualifying long term agreement—
	(a) if it is an agreement of a description prescribed by the regulations, or
	(b) in any circumstances so prescribed.
	(4) In section 20 and this section the consultation requirements" means requirements prescribed by regulations made by the Secretary of State.
	(5) Regulations under subsection (4) may in particular include provision requiring the landlord—
	(a) to provide details of proposed works or agreements to tenants or the recognised tenants' association representing them,
	(b) to obtain estimates for proposed works or agreements,
	(c) to invite tenants or the recognised tenants' association to propose the names of persons from whom the landlord should try to obtain other estimates,
	(d) to have regard to observations made by tenants or the recognised tenants' association in relation to proposed works or agreements and, estimates, and
	(e) to give reasons in prescribed circumstances for carrying out works or entering into agreements.
	(6) Regulations under section 20 or this section—
	(a) may make provision generally or only in relation to specific cases, and
	(b) may make different provision for different purposes.
	(7) Regulations under section 20 or this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament."
	52 Clause 148, leave out Clause 148.

Lord Falconer of Thoroton: My Lords, with the leave of the House, I beg to move that the House do agree with the Commons in their Amendments Nos. 51 and 52.
	The new clause created by Amendment No. 51 replaces, with modifications, the existing Clause 148 of the Bill which inserts a new Section 20 into the Landlord and Tenant Act 1985. Although the revised clause looks complex, the changes made to the existing clause are relatively straightforward.
	As regards long-term contracts, the existing clause introduces a new requirement of landlords to consult leaseholders before entering into any contract for the provision of works or services lasting for more than 12 months. Consultation would be required before entering into such a long-term contract regardless of its value. Furthermore, where the consultation requirements are not complied with, the landlord would be prevented from recovering any costs under that contract from the leaseholders.
	Respondents to the discussion paper were firmly of the view that we should set a de minimis limit for long-term contracts so that long-term contracts for less than that limit would not have to comply with the consultation requirements. We accept that such a change is necessary to ensure that landlords do not need to consult leaseholders over long-term contracts that would have minimal cost to the leaseholder.
	For example, some local authorities apportion running costs of their housing departments to leaseholders. Private sector landlords may also apportion administration costs in this way. This could mean that a landlord would have to consult leaseholders before entering into a long-term contract for the provision of stationery. The cost to the individual leaseholder would be very little and leaseholders would be very unlikely to be interested in such contracts.
	The new clause therefore provides that consultation on long-term contracts will be necessary only if the cost to the leaseholder is above a prescribed amount. It follows the precedent set by the existing consultation requirements for specific works. We will of course consult on what the prescribed amount should be. Subsections (4) and (5) of the revised Section 20 are intended to provide the maximum flexibility in determining the prescribed amount.
	We envisage occasions where a landlord does not consult because the estimated costs are less than the prescribed amount. However, if the cost subsequently increases above the prescribed amount, we believe it is unfair to put the whole amount of the cost incurred at risk. Therefore, the revised Section 20 provides that only the excess above the prescribed amount would be irrecoverable. Again, this is in line with the existing approach for consulting on specific work. Where the prescribed amount is based on the cost to individual service charge payers, only monies due from individuals in excess of the prescribed amount would be irrecoverable.
	The existing requirement to consult leaseholders on specific works costing more than a prescribed amount would be retained. This would apply in addition to any requirement to consult under a long-term contract. As with consultation on long-term contracts, subsections (3) and (5) of the new Section 20 will provide flexibility over the way in which the amount is determined.
	Existing Clause 148 provides that a leasehold valuation tribunal may, in a particular case, grant dispensation from all or any of the consultation requirements. This is intended to ensure that landlords are not penalised for technical infringements which do not disadvantage leaseholders or it is not practical in the circumstances to consult fully or at all; for example, where work needs to be carried out in an emergency. As drafted, it is arguable that Clause 148 allows such dispensation to be sought only after the event.
	Concern has been expressed that where full compliance with the consultation requirement is not practical, the landlord may be placed in a difficult position; for example, for some specialised services there may be only one supplier. The consultation requirements will require that at least two estimates be obtained. If the contract is entered into or the works are carried out without full compliance with the consultation requirements, there is a risk of not being able to recover the costs if the LVT should refuse to grant a dispensation. This new clause therefore makes it clear that a landlord may apply to an LVT for a dispensation of the requirement to consult before the works are carried out.
	Amendment No. 52 is consequential and deletes the existing Clause 148.
	Moved, That the House do agree with the Commons in their Amendments Nos. 51 and 52.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

COMMONS AMENDMENT

53 Clause 149, page 72, line 44, at end insert—
	"required to be supplied under this section."

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 53. I shall speak also to Amendments Nos. 72 and 84. This is a small group of technical amendments. Amendment No. 53 is a minor consequential amendment made in the light of the new clause to be created by Amendment No. 54. Amendment No. 72 removes from the Bill subsection (2) of Clause 174. Amendment No. 84 corrects an error in the drafting of Schedule 14.
	Moved, That the House do agree with the Commons in their Amendment No. 53.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

COMMONS AMENDMENT

54 After Clause 149, insert the following new Clause—
	"Notice to accompany demands for service charges
	After section 21A of the 1985 Act (inserted by section 149) insert—
	"21B Notice to accompany demands for service charges
	(1) A demand for the payment of a service charge must be accompanied by a summary of the rights and obligations of tenants of dwellings in relation to service charges.
	(2) The Secretary of State may make regulations prescribing requirements as to the form and content of such summaries of rights and obligations.
	(3) A tenant may withhold payment of a service charge which has been demanded from him if subsection (1) is not complied with in relation to the demand.
	(4) Where a tenant withholds a service charge under this section, any provisions of the lease relating to non-payment or late payment of service charges do not have effect in relation to the period for which he so withholds it.
	(5) Regulations under subsection (2) may make different provision for different purposes.
	(6) Regulations under subsection (2) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.""

Lord Falconer of Thoroton: My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 54. I should like to speak also to Amendments Nos. 63, 64, 66, 68 and 78. The amendments all relate to forfeiture and are perhaps of more interest than previous amendments about forfeiture.
	The Government fully accept the widespread concerns about the forfeiture system. Forfeiture is a draconian penalty and many people feel that it is unfair that a leaseholder can lose their home, possibly for the non-payment of a relatively modest debt, while the landlord obtains a large windfall profit. It has to be stressed, however, that the courts do lean towards relief from forfeiture although we accept that this requires an application for such relief to be made.
	Following the Government's consultation paper on residential leasehold reform in 1998, we announced in December 1999 in a document entitled Leasehold Reform, the Way Forward that we intended to replace forfeiture with a fairer regime. In particular, we proposed that where the landlord obtained possession, the leaseholder should be compensated for the loss of the leasehold interest after deducting moneys owed to the landlord. This remains our long-term aim.
	Although the concept may seem a relatively simple one, legally and practically the matter is very complex. When we were drawing up our draft of this Bill we considered the issue very carefully, but reluctantly came to the conclusion that we could not resolve all the complexities without delaying the introduction of the Bill.
	Instead, we decided to focus our attention on the main abuses associated with forfeiture. These include the use of forfeiture as a threat to extract payment, and also for leaseholders to challenge unreasonable charges or breaches of convenants that are unfounded. As noble Lords will know, there are a number of provisions already in the Bill which address these abuses.
	In the other place the Government undertook to consider carefully the strength of feeling on this important issue and the desire for further measures in this Bill to deliver protection for leaseholders. That is why we have come forward with further safeguards for leaseholders.
	I want to explain the additional safeguards. Amendment No. 63 is intended to prevent the use of forfeiture for small amounts. Forfeiture proceedings would be prohibited unless the amount outstanding exceeded a prescribed sum or the amount, or any part of it, had been outstanding for more than a prescribed period. On the face of the Bill the prescribed sum is set at £500. The level at which it was introduced would be set by regulation, and we would consult on that, although our current thinking is that it should be introduced at a level of £350 in the first instance. We would expect to set the prescribed period at three years. That would make forfeiture unavailable for small amounts of less than £350, unless they have been outstanding more than three years.
	Regulations made under the power would be subject to the affirmative procedure by virtue of Amendment No. 68. Administration charges and penalties for non-payment of an outstanding amount will not be taken into account in determining whether the prescribed sum has been exceeded. That would prevent landlords trying to evade the provision by adding further charges to push the total above the prescribed sum.
	Amendment No. 64 is intended to protect vulnerable leaseholders, such as the mentally ill, who are unable to respond to the various warning notices required under existing legislation or other provisions of the Bill. We propose to require landlords to take reasonable additional or alternative steps when there is no response to demands or notices. We will consult on what steps would be appropriate, practicable and reasonable. That may include a duty to investigate the leaseholder's circumstances.
	I should point out that the power would not apply in relation to properties subject to a mortgage. This is because mortgagees are normally informed of forfeiture proceedings, and have a right to seek relief—invariably they do so—to protect their security. So it is the leaseholders who do not have mortgages—for example, the elderly whose mortgages have been paid off—who would be protected by this measure. Regulations made under this power would also be subject to the affirmative procedure.
	Amendment No. 54 is intended to ensure that leaseholders are aware of their rights and obligations by providing a power to require certain information to be provided with service charge demands. And it should also help to prevent forfeiture being used as a threat by unscrupulous landlords. The form and content of these notices would be prescribed. It would set out leaseholders' rights to challenge service charges which they consider to be unreasonable and the restrictions on forfeiture. But it would also point out the possible serious consequences of non-payment of service charges, the dangers of ignoring demands and suggest that leaseholders take advice.
	Amendment No. 78 provides a similar power in relation to demands for administration charges.
	Amendment No. 66 provides that the new clauses introduced by Amendments Nos. 63 and 64 would be binding on the Crown (the other changes already apply to the Crown by virtue of Clause 163). We believe that it will be important to improve awareness among leaseholders and landlords of their rights and obligations in this somewhat complex area. It is therefore also our intention to produce a guide that will summarise, in plain English, all the relevant provisions concerning forfeiture proceedings.
	To conclude, those additional measures, together with the provisions that are already in the Bill, should go a long way towards preventing abuses associated with the existing forfeiture procedures.
	Moved, That the House do agree with the Commons in their Amendment No. 54.—(Lord Falconer of Thoroton.)

Lord Goodhart: My Lords, the right of forfeiture is an archaic right. It is a draconian penalty for breach of what is, in effect, a contractual term. It requires a person against whom forfeiture is sought to seek relief from the courts. In those cases where, because relief is not sought or for any other reason, forfeiture takes effect, it can operate unfairly and can deprive the leaseholder whose interest is forfeited of an asset of considerable value that may well exceed substantially any amount that is due.
	In those circumstances, I am glad that the Minister has accepted that there is wide pressure for the replacement of forfeiture altogether by a system that is less unfair and more suited to modern times. I regret that the Government did not introduce a proper replacement for the existing forfeiture system in this Bill. We welcome the amendments that have been made. They are moves in the right direction, but they do not go far enough.
	The consideration of Commons amendments is not the right time to replace a forfeiture system by a new, modernised and fairer system. For that reason I have not sought to table any amendment to this group of government amendments. Nevertheless, I hope that the Government will persevere and will return as soon as possible with new legislation that will remove the remedy of forfeiture from the hands of landlords, thus preventing the abuse to which the power of forfeiture has, not infrequently, led, and that they will replace forfeiture with a more appropriate remedy.
	As this is not the time or place to introduce a wholly new system, I do not oppose the amendment, but I hope that the Government will take notice and will proceed as rapidly as possible with new legislation.

Lord Jacobs: My Lords, I support my noble friend. I cannot recall there being a significant debate in the House on this subject. I recall that an amendment was tabled, but I am sure that it was not moved, to abolish forfeiture. Having read Commons Hansard thoroughly, I have seen that there was a vigorous debate in the other place on 24th January. The more one reads about it and the more one listens to the Minister today, the more one realises that we are quietly putting up with a serious injustice.
	If, for example, cars were to be subject to government forfeiture in the event of non-payment of road tax, one would expect the Government to take one's car, to sell it and subsequently to recover the road tax and associated costs and return the rest of the money, which would clearly be your due. Unfortunately, as we know, that does not happen with properties. In regard to one's home, if granted by the court, not only can the landlord recoup the amount of money and associated expenses that he is due, but he can also retain the rest of the money from your home. That is obviously unfair.
	The Government may have responded—they did not—by saying that in 1985 the Law Commission started to consider the matter but has not yet arrived at any definite conclusions. We could wait another year or two and the Law Commission may come up with some findings. Meanwhile, what do we do about this problem?
	Earlier my noble friend raised a more complex issue about housing situated over railways. Clearly that is a technical issue to which it would be difficult to find any easy alleviation. The Government have made an attempt that, in some way, deals with it.
	What can we do about this issue? I regret that we did not table an amendment, although I am not sure that it would have helped at this stage. There is one simple way in which we could alleviate the situation immediately: instead of having a footling—if one may use that word—sum as a level above which a landlord can seek forfeiture, one could have made the sum a significant one. Instead of £500, the amount could have been £5,000 or even £50,000. If that were the case, we know that for the time being at least the number of possible cases where forfeiture will be threatened—that is the important point—or sought from the courts, would be few and unlikely to trouble many people.
	In this House we have failed—I accept full responsibility on my own behalf—to recognise the situation and to do something about it. It may not be possible to deal with the matter in this Bill, but I would like the Government to consider some temporary protection. I do not believe that raising the level above £500 is significant protection. I hope that the Government will consider a larger sum. If such a provision cannot be brought in at this stage, perhaps something can be done at a later date. Unfortunately I, and no doubt two million other leaseholders, recognise that there will be another commonhold and freehold Bill. It is to be hoped that that Bill will change the position on tenure, deal with forfeiture once and for all, and perhaps bring an end to the system of tenure of leasehold which, as has been said, is unsuited to the 20th century let alone the 21st century. I am sure the Government will recognise those words.

Lord Falconer of Thoroton: My Lords, I fully recognise those words. I accept that forfeiture is a draconian penalty. Many feel that it is unfair. I take the noble Lord's point that when one forfeits the lease one does not get back the value of the lease after repayment of the outstanding debt. The issue needs to be considered. It was looked at very carefully before the Bill was proposed. It is more complex to remove the right than was thought. The choice was whether to delay the Bill to deal with those points or to bring it forward as drafted. The latter choice was made. I note the point about increasing the figure in order to make it meaningful. However, the choice was made: rather than seeking to get rid of forfeiture in an indirect way, the provision ensures that the power is not used to deal with small sums.
	I note what all noble Lords said. As the noble Lord, Lord Jacobs, said, it found an echo in another place when the matter was properly debated. I hope that in time a new Bill will deal with the problem head on.

Lord Jacobs: My Lords, before the noble and learned Lord sits down, perhaps I may say that if it is impossible to put an injustice right, totally and absolutely, one could at least go some way to alleviate the injustice. There is not a Member of your Lordships' House who does not believe that there is an injustice. Could not some more effective temporary remedy be given? It may be inadequate, but less justice is better than no justice.

Lord Falconer of Thoroton: My Lords, the amendments introduced in the Commons seek to do that. I realise that some may not believe that they are adequate but they are steps in the direction the noble Lord seeks.

On Question, Motion agreed to.

COMMONS AMENDMENTS

55 Clause 151, page 75, line 30, leave out from beginning to second "an"
	56 Page 75, line 32, leave out "or not any amount is so" and insert "a service charge is"
	57 Page 75, line 38, at end insert—
	"(1A) Subsection (1) applies whether or not any payment has been made."
	58 Page 76, line 13, leave out from "having" to end of line 14 and insert "Made any payment."
	59 Clause 152, page 77, line 38, at end insert—
	"(9A) Nothing in this section applies to the payee if the circumstances are such as are specified in regulations made by the Secretary of State."

Lord Falconer of Thoroton: My Lords, with the leave of the House, I beg to move that the House do agree with the Commons in their Amendments Nos. 55 to 59 en bloc. I wish also to speak to Amendments Nos. 77 and 79 to 82.
	Amendments Nos. 55 to 58 and 79 to 82 are being made as a consequence of a recent Court of Appeal decision, Daejan Properties Limited v London Leasehold Valuation Tribunal, in which the court ruled that leasehold valuation tribunals have the jurisdiction only to decide the reasonableness of disputed service charges that are still unpaid except under certain very limited circumstances.
	We consider this decision to be most unfortunate both from the viewpoint of leaseholders and landlords. As leaseholders become aware of its effect they may be inclined to withhold service charges until they are certain that those charges are reasonable because it may otherwise prove very difficult for them to launch any challenge.
	In the light of that development, we decided to amend the Bill to make it as clear as possible that the power of leasehold valuation tribunals to determine reasonableness and liability to pay service charges includes service charges that have already been paid. Amendments Nos. 55 to 58 are the result. Moreover, exactly the same considerations also apply to administration charges and, therefore, we need to make equivalent changes to Schedule 11 to the Bill. Amendments Nos. 79 to 82 would do so.
	Amendment No. 59 would create a new power to exempt managers by regulation from the requirement to use separate accounts for separate groups of service charge payers. Clause 152 of the Bill introduces a new requirement for managers to use separate accounts. We have received representations from managers who claim that this would be unduly expensive. We remain sceptical about such claims. Managers who already operate separate accounts say that the additional costs of doing so are relatively small, and certain banks have already designed packages to minimise the inconvenience involved and to avoid the necessity of, for example, keeping separate cheque books for separate accounts.
	None the less, we are anxious to ensure that the costs of operating separate accounts do not outweigh the benefits. These costs will, after all, inevitably be passed on to leaseholders in the form of higher service charges. We have decided, therefore, that it would be sensible to include a power in the Bill to exempt managers from the requirement to use separate bank accounts under certain circumstances. This would allow us to respond to any changes in the services provided by financial institutions, or in their charges, which might increase the costs of maintaining separate accounts to the point where it becomes unduly expensive.
	Amendment No. 77 makes a change to the way in which the Bill is drafted. Schedule 11 currently contains a definition of a fixed administration charge. However, the only place where the term "fixed administration charge" is used in the Bill is in the definition of a "variable administration charge". Therefore, this amendment would replace these definitions with a new definition of a variable service charge, thus simplifying the provision.
	Moved, That the House do agree with the Commons in their Amendments No. 55 to 59.—(Lord Falconer of Thoroton.)

Baroness Gardner of Parkes: My Lords, I am delighted with Amendments Nos. 57 and 58—and, to a lesser extent, Amendment No. 59. They are practical. The points made about expense could be relevant. No doubt the regulations would cover checking fully on the reliability of anyone who was so designated. Amendments Nos. 57 and 58 are good progress.

On Question, Motion agreed to.

COMMONS AMENDMENT

60 After Clause 154 , insert the following new clause—
	Charges under estate management schemes
	(1) This section applies where a scheme under—
	(a) section 19 of the 1967 Act (estate management schemes in connection with enfranchisement under that Act),
	(b) Chapter 4 of Part 1 of the 1993 Act (estate management schemes in connection with enfranchisement under the 1967 Act or Chapter 1 of Part 1 of the 1993 Act), or
	(c) section 94(6) of the 1993 Act (corresponding schemes in relation to areas occupied under leases from Crown), includes provision imposing on persons occupying or interested in property an obligation to make payments ("estate charges").
	(2) A variable estate charge is payable only to the extent that the amount of the charge is reasonable; and "variable estate charge" means an estate charge which is neither—
	(a) specified in the scheme, nor
	(b) calculated in accordance with a formula specified in the scheme.
	(3) Any person on whom an obligation to pay an estate charge is imposed by the scheme may apply to a leasehold valuation tribunal for an order varying the scheme in such manner as is specified in the application on the grounds that—
	(a) any estate charge specified in the scheme is unreasonable, or
	(b) any formula specified in the scheme in accordance with which any estate charge is calculated is unreasonable.
	(4) If the grounds on which the application was made are established to the satisfaction of the tribunal, it may make an order varying the scheme in such manner as is specified in the order.
	(5) The variation specified in the order may be—
	(a) the variation specified in the application, or
	(b) such other variation as the tribunal thinks fit.
	(6) An application may be made to a leasehold valuation tribunal for a determination whether an estate charge is payable by a person and, if it is, as to—
	(a) the person by whom it is payable,
	(b) the person to whom it is payable,
	(c) the amount which is payable,
	(d) the date at or by which it is payable, and
	(e) the manner in which it is payable.
	(7) Subsection (6) applies whether or not any payment has been made.
	(8) The jurisdiction conferred on a leasehold valuation tribunal in respect of any matter by virtue of subsection (6) is in addition to any jurisdiction of a court in respect of the matter.
	(9) No application under subsection (6) may be made in respect of a matter which—
	(a) has been agreed or admitted by the person concerned,
	(b) has been, or is to be, referred to arbitration pursuant to a post-dispute arbitration agreement to which that person is a party,
	(c) has been the subject of determination by a court, or
	(d) has been the subject of determination by an arbitral tribunal pursuant to a post-dispute arbitration agreement.
	(10) But the person is not to be taken to have agreed or admitted any matter by reason only of having made any payment.
	(11) An agreement (other than a post-dispute arbitration agreement) is void in so far as it purports to provide for a determination—
	(a) in a particular manner, or
	(b) on particular evidence, of any question which may be the subject matter of an application under subsection (6).
	(12) In this section—
	"post-dispute arbitration agreement", in relation to any matter, means an arbitration agreement made after a dispute about the matter has arisen, and "arbitration agreement" and "arbitral tribunal" have the same meanings as in Part 1 of the Arbitration Act 1996 (c. 23)."

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 60.
	Moved, That the House do agree with the Commons in their Amendment No. 60.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

COMMONS AMENDMENT

61 After Clause 158, insert the following new clause—
	"INSURANCE OTHERWISE THAN WITH LANDLORD'S INSURER
	(1) This section applies where a long lease of a house requires the tenant to insure the house with an insurer nominated or approved by the landlord ("the landlord's insurer").
	(2) The tenant is not required to effect the insurance with the landlord's insurer if—
	(a) the house is insured under a policy of insurance issued by an authorised insurer,
	(b) the policy covers the interests of both the landlord and the tenant,
	(c) the policy covers all the risks which the lease requires be covered by insurance provided by the landlord's insurer,
	(d) the amount of the cover is not less than that which the lease requires to be provided by such insurance, and
	15
	(e)
	the tenant satisfies subsection (3).
	(3) To satisfy this subsection the tenant—
	(a) must have given a notice of cover to the landlord before the end of the period of fourteen days beginning with the relevant date, and
	(b) if (after that date) he has been requested to do so by a new landlord, must have given a notice of cover to him within the period of fourteen days beginning with the day on which the request was given.
	(4) For the purposes of subsection (3)—
	(a) if the policy has not been renewed the relevant date is the day on which it took effect and if it has been renewed it is the day from which it was last renewed, and
	(b) a person is a new landlord on any day if he acquired the interest of the previous landlord under the lease on a disposal made by him during the period of one month ending with that day.
	(5) A notice of cover is a notice specifying—
	(a) the name of the insurer,
	(b) the risks covered by the policy,
	(c) the amount and period of the cover, and
	(d) such further information as may be prescribed.
	(6) A notice of cover—
	(a) must be in the prescribed form, and
	(b) may be sent by post.
	(7) If a notice of cover is sent by post, it may be addressed to the landlord at the address specified in subsection (8).
	(8) That address is—
	(a) the address last furnished to the tenant as the landlord's address for service in accordance with section 48 of the 1987 Act (notification of address for service of notices on landlord), or
	(b) if no such address has been so furnished, the address last furnished to the tenant as the landlord's address in accordance with section 47 of the 1987 Act (landlord's name and address to be contained in demands for rent).
	51
	(9)
	But the tenant may not give a notice of cover to the landlord at the address specified in subsection (8) if he has been notified by the landlord of a different address in England and Wales at which he wishes to be given any such notice.
	(10) In this section—
	"authorised insurer", in relation to a policy of insurance, means a person who may carry on in the United Kingdom the business of effecting or carrying out contracts of insurance of the sort provided under the policy without contravening the prohibition imposed by section 19 of the Financial Services and Markets Act 2000 (c. 8),
	"house" has the same meaning as for the purposes of Part 1 of the 1967 Act,
	"landlord" and "tenant" have the same meanings as in Chapter 1 of this Part,
	"long lease" has the meaning given by sections 74 and 75 of this Act, and
	"prescribed" means prescribed by regulations made by the appropriate national authority."

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 61. I wish to speak also to Amendment No. 65
	Amendment No. 61 is intended to deal with the problem of provisions in leases of houses which require the leaseholder to insure the property with an insurer nominated by the landlord. This problem was raised by many Members in the other place. The noble Baroness, Lady Hanham, tabled an amendment during the first Committee stage on 22nd March 2001 on nominated insurers, an amendment which was supported by the noble Lord, Lord Goodhart, and others. My noble friend Lord Whitty undertook to consider the matter further. I am pleased to inform the House that we have been able to deal with this problem.
	We believe that it is wrong for landlords to exploit a monopoly over the provision of insurance in order to gain higher commission. At the same time we recognise that landlords have a legitimate interest in ensuring that leasehold property is insured. The new clause will allow leaseholders the opportunity to shop around for the best deal while providing protection for the landlord's interest.
	It provides that any clause in a lease requiring the leaseholder to insure with an insurer nominated by the landlord will be deemed to be satisfied if certain conditions are met. In short, these conditions are that the leaseholder must insure the property with an insurer authorised to carry on business in the UK. The policy must note the interests of both the landlord and the leaseholder. It must cover the risks that are required to be covered in the lease and the amount of cover must not be less than that required by the lease. The leaseholder must provide the landlord with evidence of cover or renewal within 14 days of insurance being taken out or renewed. This should provide an effective remedy to the widespread abuses. Amendment No. 62 is a technical amendment intended to strengthen these provisions.
	Amendment No. 65 will ensure that the new clause created by Amendment No. 61 on nominated insurers applies to Crown land.
	Moved, That the House do agree with the Commons in their Amendment No. 61.—(Lord Falconer of Thoroton.)

AS AN AMENDMENT TO COMMONS AMENDMENT NO. 61

61A Line 16, at end of inserted subsection (2)(e) insert "or (9A)".

Lord Kingsland: My Lords, I beg to move Amendment No. 61A, as an amendment to Commons Amendment No. 61, and speak also to Amendment No. 61B. As the noble and learned Lord, Lord Falconer, indicated, on 22nd March 2001 my noble friend Lady Hanham introduced an amendment giving the freedom to long lessees of dwellinghouses to insure with a company of their choice. It was withdrawn despite attracting much cross-party support. In Committee in another place, the Government introduced a like amendment for which we are grateful.
	However, both our amendment and the Government's failed to deal with the situation, to which their attention was drawn in another place, in which a lessor covenants to insure a dwellinghouse and then recovers the cost from the lessee through additional ground rent or other means—in effect obliging the lessee to insure with the lessor's nominated company.
	In another place, the Minister was unprepared to accept that addition because where houses are on an estate with communal parts there may be advantages in having a single insurance policy. That may be so, or not so. Where it is so there is nothing to prevent lessees clubbing together to that effect. But there is no logical reason why such an arrangement should always be desirable. In circumstances where it is not, house owners should be free to make their own insurance arrangements. I beg to move.
	Moved, That Amendment No. 61A, as an amendment to Commons Amendment No. 61, be agreed to.—(Lord Kingsland.)

Lord Goodhart: My Lords, I support the amendment. It raises an almost identical problem to that where the lessee is required to insure with a nominated or approved insurer. I express my gratitude to a Birmingham solicitor, Mr David Henson, who has been highly active in raising the issue, as the noble and learned Lord will know. It is not uncommon practice to find leases in that form.
	The problem is that a landlord who requires a lessee to insure with a particular insurer effectively deprives the lessee of the opportunity to look for a cheaper insurance policy. He is also in a position to derive a substantial benefit from commission from the insurer. The same situation arises where the landlord insures but is entitled to recover the cost from the lessee.
	It is highly desirable that the lessee should insure under the lease and that lessees wanting to take over responsibility for insurance from the landlord should be entitled on giving notice to do so. It is obviously not appropriate for blocks of flats where the landlord has a substantial interest in insuring the structure, particularly as in many cases it is his responsibility to maintain that structure.
	I hope that the Government will look at the issue and deal with it to enable lessees who have to reimburse their landlords for insurance to obtain the same benefits available to lessees under obligation to insure the house themselves.

Lord Falconer of Thoroton: My Lords, that is an important point. It deals with where the lease requires the landlord to insure a house and recover the costs through service charges. The amendments attempt to provide the transfer of responsibility for insurance to the leaseholder. What underlies the argument is that this could be a way of getting around the matter dealt with in the previous amendments.
	I have sympathy for the motive behind the amendments, but it would not be right to make such changes without properly consulting those who may be affected. In any event, there are problems with the amendment, which the noble Lord, Lord Goodhart, touched on. It is our understanding that most house leases place the duty to insure on the leaseholders. While there are exceptions, there are usually good reasons for them. For example, where houses on an estate are interdependent structures with communal parts there may be advantages—as the noble Lord, Lord Goodhart, acknowledged and as in the case of blocks of flats—in having a single policy covering the whole complex. Failure to insure properly by one lessee may have knock-on effects for other parts of the estate.
	In such cases, we would not want arrangements whereby a landlord or residents' management company insured the whole complex to be disrupted. The noble Lord, Lord Kingsland, referred to tenants clubbing together on a voluntary basis. That is fine so long as everyone agrees. But what if one person does not?
	On a more practical level, the application of the amendment to such a situation is unlikely to work or achieve the desired result as the lessee could not simply replace the lessor in an insurer covenant which covered the whole estate. The amendments effectively seek to insert the word "lessee" for the word "lessor". That will not work where the obligation covers the whole estate. That illustrates another difficulty with the amendments. We cannot anticipate the type of insurer covenants in a lease, and the simple replacement of "lessor" for "lessee" while retaining the terms of the covenant may not be practical or effective in every case.

Lord Goodhart: My Lords, I am grateful to the noble and learned Lord. Surely such a situation arises anyway when there is an enfranchisement of a house under the Leasehold Reform Act 1967? In such a case the lessee acquires the freehold. Unless there is an estate management scheme under which the insurance remains the responsibility of the landlord, surely the former lessee, now the freeholder, will be in a position to decide with whom he will insure and what insurance is needed?

Lord Falconer of Thoroton: My Lords, there is an existing remedy. It is open to the lessee to apply for a variation of a lease. The existing lessee can apply to vary the lease and replace "lessor" with the word "lessee" in the hypothesis advanced by noble Lords supporting the application. The Bill will simplify and extend the arrangements for such variations. The proposal may cause difficulties and may not be in the interests of the lessee.
	More fundamentally, as I said, we do not feel that it would be right to transfer responsibilities under a lease from one party to another without properly consulting those who would be affected and, at this stage in the proceedings, we would not want to delay the passage of this important Bill while we undertook such consultation.
	Where a lease provides for the landlord to insure, leaseholders can challenge the reasonableness of the insurance premium at a leasehold valuation tribunal under the provisions of the Landlord and Tenant Act 1985 relating to service charges. Leaseholders' rights in relation to service charges have been strengthened by other parts of the Bill and it is our intention to reduce the minimum fee for LVT applications to make it more cost-effective to challenge small amounts.
	There appears to be a difficulty that the amendment may, in part, solve; but it may also cause other problems. However, just as there are other matters left over from the Bill, this is another issue that we should take note of and consider carefully because it is a legitimate point. In those circumstances, I invite the noble Lord to withdraw his amendment.

Lord Kingsland: My Lords, I shall certainly not press the amendment. I am grateful to the Minister for his ingenious response to my remarks. I accept that the amendment could be improved. I also accept that there are certain circumstances in which the problem may be overcome by different routes; for example, by applications for variation.
	Nevertheless, there remains a real possibility that the current situation could lead to unfairness. I hope that the Minister and his team will keep the matter under close supervision in the years that intervene between this Bill being enacted and the next amending legislation—which may not be so very far away. I beg leave to withdraw my amendment.

Amendment No. 61A, as an amendment to Commons Amendment No. 6l, by leave, withdrawn.
	[Amendment No. 61B, as an amendment to Commons Amendment No. 61, not moved.]
	On Question, Motion agreed to.

COMMONS AMENDMENTS

62 After Clause 158, insert the following new clause—
	"Extension of right to challenge landlord's choice of insurer
	(1) Paragraph 8 of the Schedule to the 1985 Act (right to challenge landlord's nomination of insurer) is amended as follows.
	In sub-paragraphs (1) and (2), after "nominated" insert "or approved".
	(3) In sub-paragraph (4), after "nominate" (in both places) insert "or approve"."
	63Before Clause 160, insert the following new clause—
	e to pay small amount for short period
	(1) A landlord under a long lease of a dwelling may not exercise a fight of re-entry or forfeiture for failure by a tenant to pay ail amount consisting of rent, service charges or administration charges (or a combination of them) ("the unpaid amount") unless the unpaid amount—
	(a) exceeds the prescribed sum, or
	(b) consists of or includes an amount which has been payable for more than a prescribed period. escribed under subsection (1)(a) must not exceed £500.
	(3) If the unpaid amount includes a default charge, it is to be treated for the purposes of subsection (1)(a) as reduced by the amount of the charge; and for this purpose "default charge" means an administration charge payable in respect of the tenant's failure to pay any part of the unpaid amount.
	(4) In this section "long lease of a dwelling" does not include
	(a) a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies,
	(c) a tenancy of an agricultural holding within the meaning of the Agricultural Holdings Act 1986 (c. 5) in relation to which that Act applies, or
	(d) a farm business tenancy within the meaning of the Agricultural Tenancies Act 1995 (c. 8).
	(5) In this section—
	"administration charge" has the same meaning as in Part 1 of Schedule 11,
	"dwelling" has the same meaning as in the 1985 Act,
	"landlord" and "tenant" have the same meaning as in Chapter 1 of this Part,
	"long lease" has the meaning given by sections 74 and 75 of this Act, except that a shared ownership lease is a long lease whatever the tenant's total share,
	"prescribed" means prescribed by regulations made by the appropriate national authority, and
	"service charge" has the meaning given by section 18(1) of the 1985 Act."
	64 After Clause 162, insert the following new clause—
	"Power to prescribe additional or different requirements
	(1) The appropriate national authority may by regulations prescribe requirements which must be met before a right of re-entry or forfeiture may be exercised in relation to a breach of a covenant or condition in a long lease of an unmortgaged dwelling.
	(2) The regulations may specify that the requirements are to be in addition to, or instead of, requirements imposed otherwise than by the regulations.
	(3) In this section long lease of a dwelling" does not include—
	(a) a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies,
	(e) a tenancy of an agricultural holding within the meaning of the Agricultural Holdings Act 1986 (c. 5) in relation to which that Act applies, or
	(f) a farm business tenancy within the meaning of the Agricultural Tenancies Act 1995 (c. 8).
	(4) For the purposes of this section a dwelling is unmortgaged if it is not subject to a mortgage, charge or lien.
	(5) In this section—
	"dwelling" has the same meaning as in the 1985 Act, and
	"long lease" has the meaning given by sections 74 and 75 of this Act, except that a shared ownership lease is a long lease whatever the tenant's total share."
	65 Clause 163, page 85, line 4, leave out "159" and insert "(Insurance otherwise than with landlord's insurer)"
	66 Clause 163, page 85, line 4, at end insert "and sections (Failure to pay small amount for short period) and (Power to prescribe additional or different requirements)"

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 62 to 66.
	Moved, That the House do agree with the Commons in their Amendments Nos. 62 to 66.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

COMMONS AMENDMENT

67 Clause 166, page 86, line 9, at end insert—
	"(5A) The Lands Tribunal may not order a party to the appeal to pay costs incurred by another party in connection with the appeal unless he has, in the opinion of the Lands Tribunal, acted frivolously, vexatiously, abusively, disruptively or otherwise unreasonably in connection with the appeal.
	(5B) In such a case the amount he may be ordered to pay shall not exceed the maximum amount which a party to proceedings before a leasehold valuation tribunal may be ordered to pay in the proceedings under or by virtue of paragraph 10(3) of Schedule 12."

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 67. In doing so, I shall speak also to Amendment No. 83. Both amendments are linked to the award of costs. Amendment No. 67 would limit the power of the Lands Tribunal to award costs. When the Bill was previously before the House, the noble Baroness, Lady Gardner of Parkes, who, unfortunately, is not now in her place, argued most persuasively that the Lands Tribunal's unlimited power to award costs could discourage leaseholders from exercising their rights. We promised then that we would explore the scope for amending the Bill in the other place in order to address the concerns expressed by the noble Baroness. Amendment No. 67 is a result of that exploration.
	Where a case involves an appeal against a decision made by a leasehold valuation tribunal, the Lands Tribunal cannot award costs unless a party has acted frivolously, vexatiously, abusively, disruptively, or otherwise unreasonably, in connection with the appeal. Moreover the maximum costs will be limited to £500, or such other amount as may be specified in regulation. This will provide leaseholders with far greater certainty and, thus, encourage them to exercise the rights that Parliament has granted to them. I see that the noble Baroness, Lady Gardner of Parkes, has just returned to the Chamber. I hope that she will agree that this amendment meets her concerns.
	Amendment No. 83 is a technical amendment, which makes it clear that the £500 limitation on the ward of costs applies only to costs awarded under paragraph 10 of Schedule 12.
	Moved, That the House do agree with the Commons in their Amendment No. 67.—(Lord Falconer of Thoroton.)

Baroness Gardner of Parkes: My Lords, I should just like to express my thanks to the Minister. I received a message on my pager regarding an urgent phone call; otherwise I should have been present to hear the Minister's opening remarks. I shall, of course, read his introduction in Hansard.

On Question, Motion agreed to.

COMMONS AMENDMENT

68 Clause 169, page 86, line 36, after "under" insert "section (Failure to pay small amount for short period) or (Power to prescribe additional or different requirements) or"

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 68.
	Moved, That the House do agree with the Commons in their Amendment No. 68.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

69 Clause 172, page 87, line 19, at beginning insert "Apart from section 102 and sections 168 to 170,"
	70 Page 87, line 27, after "1" insert "or section 171 and Schedule 14 so far as relating to section 102"
	71 Page 87, line 28, after "14" insert "so far as otherwise relating"

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 69 to 71. I should like to speak also to Amendment No. 85. This group of technical amendments is intended to bring about the early commencement of Clause 102 and Clauses 168, 169 and 170, and subsequently to provide for the repeal of Clause 102.
	Moved, That the House do agree with the Commons in their Amendments Nos. 69 to 71.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

72 Clause 174, page 87, line 35, leave out subsection (2)
	73 Schedule 5, page 95, line 6, leave out "(1) and (2)"
	74 Page 96, line 25, leave out "section 21" and insert "Sections 21 and 22"
	75 Page 96, leave out lines 27 to 32
	76 Schedule 8, page 112, line 13, leave out from "tenants" to end of line 14 and insert ", as" substitute "persons who are participating members of the RTE company immediately before a binding contract is entered into in pursuance of the initial notice, as". and
	(b) for "participating tenants, once" substitute "those participating members, once".
	77 Schedule 11, page 121, line 23, leave out from "Schedule" to end of line 28 and insert ""variable administration charge" means an administration charge payable by a tenant which is neither—
	(a) specified in his lease, nor
	(b) calculated in accordance with a formula specified in his lease."
	78 Page 122, line 12, at end insert—
	"Notice in connection with demands for administration charges
	3A (1) A demand for the payment of an administration charge must be accompanied by a summary of the rights and obligations of tenants of dwellings in relation to administration charges.
	The appropriate national authority may make regulations prescribing requirements as to the form and content of such summaries of rights and obligations.
	(3) A tenant may withhold payment of an administration charge which has been demanded from him if sub-paragraph (1) is not complied with in relation to the demand.
	Where a tenant withholds an administration charge under this paragraph, any provisions of the lease relating to non-payment or late payment of administration charges do not have effect in relation to the period for which he so withholds it."
	79 Page 122, leave out line 14
	80 Page 122, line 16, leave out "or not any amount is so" and insert "an administration charge is"
	81 Page 122, line 21, at end insert—
	"(1A) Sub-paragraph (1) applies whether or not any payment has been made."
	82 Page 122, line 34, leave out from "having" to end of line 35 and insert "made any payment."
	83 Schedule 12, page 126, line 21, after "proceedings" insert "by a determination under this paragraph"
	84 Schedule 14, page 131, line 18, leave out first "and"
	85 Page 134, line 39, at end insert—
	"Commonhold and Leasehold Reform Act 2002 Section 102".

Lord Falconer of Thoroton: My Lords, I beg to move that the House to agree with the Commons in their Amendments Nos. 72 to 85.
	Moved, That the House do agree with the Commons in their Amendments Nos. 72 to 85.—(Lord Falconer of Thoroton.)

On Question, Motion agreed to.

Police Reform Bill [HL]

Report received.
	Clause 1 [National Policing Plan]:

Lord Dixon-Smith: moved Amendment No. 1:
	Page 1, line 6, at beginning insert "After consultation with relevant persons,"

Lord Dixon-Smith: My Lords, in moving this amendment, it is necessary to refer to the Bill "as drafted". We tabled these amendments not knowing what amendments the Government would bring forward. The Bill, as drafted, permitted the Secretary of State to put forward proposals for a plan without consulting anyone. We felt that that was wrong and that consultation should take place. Our amendments were designed to give effect to that aim. I am delighted to welcome the fact that the Government have seen the light on consultation and are introducing their own amendments, which are included in this grouping.
	There is a further question wrapped up in this proposal as regards the timing with which these plans should be brought forward. The House will recall that, in Committee, we proposed the end of October. The Government have now tabled an amendment that would make the due date for the normal provision of these plans the end of November. That is a great move in the right direction—and, again, it is most welcome.
	However, I am bound to point out that the six months' period was not suggested without regard to practicality: it was a valid point. It has just occurred to me that we shall now have a much greater degree of consultation on the preparation of such plans. Perhaps the consultations will take care of the extra months, so to speak, because everyone will know what is coming. I look forward to hearing the Minister's introductory remarks when he speaks to his amendments in this group. I beg to move.

Lord Rooker: My Lords, I am grateful for the remarks made by the noble Lord, Lord Dixon-Smith. Given the amendments that we now bring forward on Report, I believe that I shall be able to show during this evening's proceedings that we have been the most open and the most listening government ever in respect of this Bill in that we took note of what was said in your Lordships' House in Committee. I mean that genuinely. Many issues were raised in Committee that required some thought. Indeed, because of the configuration of recesses, I also accept the fact that, when tabling amendments, it was necessary for the Opposition to set out their stall somewhat earlier without advance knowledge of what the Government proposed. I hope that I shall be able to satisfy noble Lords.
	The Government have brought forward Amendments Nos. 3, 5, 8 and 10 in the light of the debates in Committee. Genuine questions about timing were raised as regards laying the plan before Parliament. In order to be able to take the national policing plan into account when developing local plans, we recognise that police authorities and chief officers need to have sight of it in good time. We believe that 30th November is sufficiently far in advance. I repeat the point I made in Committee. The drafting of the plan will have been discussed over a number of months. As such, police authorities will have plenty of warning in advance of the formal publication date of its likely content—not every dot and comma, but "its likely content".
	In the amendments we have allowed for delayed publication in exceptional circumstances. This country has lost the habit of having October elections, which used to be the traditional time of the year for general elections. At least, that was so in my younger days. If a new administration is faced with different priorities for the police service, or, indeed, with a major incident like 11th September of last year, this may lead to a reassessment of policing priorities.
	In developing the national policing plan, we made clear in the White Paper that we would consult widely with our tripartite partners, and other interested bodies, via the national policing forum. Certain individual elements of the plan are also the subject of extensive consultation in their own right, as was made clear in Committee. For example, Section 37 of the Police Act 1996 requires the Home Secretary to consult on the national objectives for police authorities.
	The national policing forum will be a non-statutory body to advise the Home Secretary on policing matters in general and, in particular, on the national policing plan. Its membership will include representatives of the Association of Police Authorities, the Association of Chief Police Officers and other police staff associations as well as victims' and ethnic minority groups.
	To allow—so that there is no misunderstanding about the drafting—for the future flexibility in the membership and the role of the national policing forum, we do not propose to establish it by statute. But we are more than happy to confirm on the face of the Bill that in drawing up the annual plan there should be consultation with the tripartite partners, namely the Association of Chief Police Officers and the Association of Police Authorities.
	Government Amendments Nos. 5 and 10 pick up on points made in Committee about the strategic nature of the national policing plan. In its briefing paper to Peers the Association of Police Authorities pointed out that the list of matters to be included in the plan made no mention of best value performance indicators set out in the Local Government Act 1999. We are happy to correct that omission and also to include any general performance targets set under Section 38 of the Police Act 1996. These additions reinforce the strategic nature of the national policing plan. We are emphatically not concerned here—unlike what the BBC alleged this morning—with the micro-management and the day-to-day management of police operations. We have said that repeatedly. I hope that, for the avoidance of doubt, the amendments make that abundantly clear.
	I turn to Amendment No. 7. On the contents of the plan, the words that the noble Lords, Lord Dholakia and Lord Bradshaw, and the noble Baroness, Lady Harris, seek to delete allow flexibility for the contents of the plan to include matters not specifically mentioned elsewhere. The words should be retained.
	The focus of the plan is on the 43 forces in England and Wales. New Section 36A(2) refers to the strategic policing priorities generally for the police forces maintained for police areas. The National Criminal Intelligence Service and the National Crime Squad are not police forces. They are governed by separate legislation and have different lines of accountability. They are national organisations and their priorities are, in effect, already national priorities. That means that it would be inappropriate to include the objectives set for NCIS and NCS in the national policing plan, as proposed by Amendment No. 6.
	The noble Lord, Lord Dixon-Smith, mentioned the timing of the consultation. I hope that noble Lords will agree that the government amendments address what were, I accept, genuine concerns raised by the Opposition Benches in Committee. Therefore, I hope that they will not press their amendments but will allow the government amendments to be inserted in the Bill.

Baroness Harris of Richmond: My Lords, the Minister has anticipated our amendments. I should like to speak to Amendments Nos. 4, 6 and 7. I apologise to the House for attaching myself so late to the Bill. I assure your Lordships that I have followed very closely its progress and the proceedings quite minutely. I have read every word that has been uttered. I am happy to join, although belatedly.
	The Minister has addressed Amendment No. 4. We welcome the Government's recognition that the Bill should specify the date for the Home Secretary to publish the national policing plan. We wanted to make sure that the Government took a close look at its timing. In my experience—which is not little—by the end of November police authorities' local policing plans are well advanced in their preparation. They will not be able to use the national plan as a strategic framework. So, as the Minister said, it is important and extremely welcome that there is consultation on the national plan with the APA and the ACPO.
	The Minister suggested that the consultation will mean that police authorities have a good idea of what might be in the national plan, long before it is published. I am sure that that will be the case. But until it is actually finalised, authorities will not be able to proceed with any certainty. It is not unknown for the ministerial priorities to change between conception, consultation and finalisation. In fact they did this year. The amendment of the noble Lord, Lord Dixon-Smith, asks for the national plan to be published by 30th September. The Government have gone for 30th November. Our amendment offers the House a sensible compromise—perhaps the third way. It is 31st October. What difference does a month make? At that stage in the planning it makes quite a lot.
	Police authorities desperately want to work with the Government to ensure that local plans reflect both national and local needs.
	I turn to Amendment No. 6. The Minister talked about the National Crime Squad and the NCIS. I hear what he says, but our amendment seeks to bring the two together. There must be a coherency between national and local efforts. The Home Secretary is responsible for setting the national policing priorities both for local police authorities and for NCIS and NCS. But there are two separate parallel exercises needed to do that. Indeed, this year the proposed priorities for them were not received for consultation until March. They were finalised only at the beginning of April. In order for the national plan to be effective, it should seek to draw those separate exercises together. The plan should set the strategic policing picture. I hope that the Minister will take that point away and rethink it.
	Finally, I turn to Amendment No. 7. It seeks to leave out the words "plans and advice". They effectively would give the Government scope to include anything it wanted in the national plan. It is important that the Government think through more fully what that national plan needs to cover and to set that out precisely in legislation.

Lord Fowler: My Lords, I should like one point of clarification from the Minister. He was forthcoming so far as concerns the police forum. Can he state further the bodies that the Home Secretary will consult before setting out the national policing plan? One of the bodies which it would be sensible to consult is the Police Federation. It has vast experience. It represents rank and file officers in this country. It would be foolish to proceed without its input.
	The Home Secretary's statement in February that the Police Federation had been,
	"resisting change for decades",
	does not exactly lead to confidence that its voice will be listened to. I personally do not agree with what the Home Secretary said; nor, I imagine, do many others. I can certainly believe that at times the Police Federation represents a view which is not in line with Home Office thinking; for example, on community support officers, which we come to later in the Bill, or on police recruiting. But, goodness knows, it is not alone in taking that view. So it would be absurd if the Police Federation were to be excluded. I hope that I can infer from what the Minister is saying that not only will the Government consult with a body that includes the Police Federation, but that there is no question of its view simply being cast to one side.
	It was an unjust remark by the Home Secretary. I hope that the Minister will think again on the Government's attitude and will confirm that that view— perhaps put at a particular time—does not represent a disdainful view of the Police Federation's contribution to this debate.

Lord Peyton of Yeovil: My Lords, I want to make a few comments. The noble Lord was dealing with the government amendments in the first group of amendments. There are two amendments to which I should like to draw attention. The first is Amendment No. 5, which states:
	"the specification, under section 4 of the Local Government Act 1999 (performance indicators), of performance indicators (within the meaning of that section) for police authorities".
	That is a fairly ghastly piece of drafting—ugly is a polite word to use about it—but I shall return to performance indicators in a moment. Amendment No. 10 raises a similar point. It states:
	"'general direction' means a direction under section 38 establishing performance targets for all police authorities to which section 37 applies".
	After some of the Minister's comments in Committee, I am absolutely sure that he will have done his best to push, influence, squeeze or press the Home Office, which is not always responsive to Ministers, into some sort of positive action. When amendments deal with matters such as performance indicators and performance targets, I begin to shake in my shoes with fear and horror.
	I should be grateful to the Minister if, when he replies, he could tell us in some detail what are meant by performance targets, how they are measured and what are the indicators that will show whether the targets have been reached. One could easily joke about the matter, but performance indicators and performance targets, when applied to the immense complexities of operations such as that of the police in the difficult climate of crime with which they must contend today, are likely to prove unhelpful rather than the reverse. I hope that the noble Lord will do his best to set at rest my real doubts about those two matters.

Earl Ferrers: My Lords, when the Minister is trying to put at rest the doubts of my noble friend Lord Peyton, perhaps he may also put my doubts to rest. I have a great deal of sympathy for what my noble friend has said. Nowadays, everything is about setting targets. Targets must be set for people to achieve. In the case of policing, that is difficult, as it is in the case of the National Health Service. People end up trying to chase the target and ensure that they achieve it. That becomes the pre-eminent factor, whereas the people being served are secondary.
	I remember when one of the targets was the number of cases resolved. The police have been known to go to people in prison to ask if they did this or that. If they said yes, the number of cases solved rose and the target was achieved. That is not the right way to proceed. I am concerned that the police will find themselves fettered by the targets and that all their efforts will go to achieving them, as opposed to achieving better policing. I hope that the Minister will give a great deal of thought to that.

Lord Borrie: My Lords, I am not sure that I share the anxieties and concerns of the noble Lord, Lord Peyton, and the noble Earl, Lord Ferrers, about performance indicators or performance targets, which may be just as good for policemen as they are for other parts of the public sector—and, indeed, the private sector.
	I wonder whether one of the objections of the noble Lord, Lord Peyton, to Amendment No. 5 was the sheer duplication of the phrase "performance indicators". First, we are told in parentheses that that is what Section 4 of the 1999 Act is all about; we are then told that the words "performance indicators" are to be understood within the meaning of that section. There seems to be a duplication there, which I hope can be avoided.

Lord Dholakia: My Lords, I have much sympathy with the noble Lord, Lord Peyton, for asking precisely what the Home Office has in mind for performance targets. I chaired a group called Policing for London, which published its report only last week, and on which both the Home Office and the police were represented. A key finding of the report stated:
	"The current emphasis on narrow numerical performance measures in police management is distorting performance and reducing the quality of service".
	That is the most recent research in which the Home Office has participated. Will the Minister therefore elaborate on what is likely to happen about performance indicators?

Lord Rooker: My Lords, tempted though I am by noble Lords who may want to change the basis of the debate, I shall not go into detail about the indicators.
	Perhaps I may deal first with the important point raised by the noble Lord, Lord Fowler. I listed the representatives on the National Policing Forum, but may have omitted some in the interests of brevity. They include the Association of Police Authorities, the Association of Chief Police Officers, other police staff associations—namely, the Police Federation and other bodies such as the Police Superintendents' Association—representatives of victims and of ethnic minorities. I might add Unison, the trade union for civilian staff. So no battle lines have been drawn, as it were. It is quite unfair of the noble Lord, Lord Fowler to drag up things that were said in February; it is now April and we have moved on a little since then.
	The noble Lord, Lord Peyton, picked on Amendment No. 5 because he thought that its drafting was ugly. I am sucking up to everyone to get this Bill through. The parliamentary draftsman has done an excellent job and your Lordships' House has done an excellent job of scrutiny of his original drafting. Not having the Local Government Act 1999 in front of me, I should imagine that the words that appear to be duplicated are not effectively so, it is just legalese. Reference is made to Section 4, which must have a side title, "performance indicators", which I suspect is given for declaratory purposes.
	I am not sure whether the noble Lord, Lord Peyton, was in the Chamber—he may have been arriving at his seat—when I made the point that the provision is being added to the Bill now, having been omitted from the first draft, because the Association of Police Authorities, which, I have discovered, is well represented in this House, drew to our attention during Committee that we had not mentioned best value performance indicators in the Bill. The amendment is to correct that omission, because they concern general, strategic matters.
	The noble Earl, Lord Ferrers, is quite right: if one does not manage properly, one can be obsessed with the indicators to the point of failing at the main job. That means that we must be careful how we set the indicators. During my time at the Home Office, we have drastically reduced the number of best value indicators. I know that because I was discussing one indicator relating to the Immigration Service with my ministerial colleagues. It was thought that it was not strictly necessary. We were trying to cut down on indicators so that those responsible could agree targets and indicators and have a number of them such that their management did not become an obsession to the extent of falling down on the main job.
	Noble Lords have given an important warning about the issue, but, on the other hand, no private sector company, in the marketplace or anywhere else, that wants to deliver quality services to its customers and use quality staff will do so without some measure of performance as it goes along. It will not wait until it discovers that it has a failure on its hands and say, "We didn't measure what we were doing at the time". Most firms will set a budget; this is like a budget for management.
	The performance indicators are subject to consultation with the Association of Police Authorities and the Association of Chief Police Officers before publication. Examples include a 25 per cent reduction in burglaries per thousand households; a 30 per cent reduction in vehicle crime per thousand of population; and a 14 per cent reduction in robberies by 2005 in five of the major metropolitan areas. Those are generalised; they are not micro-management indicators. It would be difficult for anyone to argue against them, although they might argue about the actual figures. It is useful to have a target.
	I hope that I have answered the question about duplication, perhaps not to the total satisfaction of the noble Lord, Lord Peyton of Yeovil, as he is, I think, about to point out.

Lord Peyton of Yeovil: My Lords, the Minister is completely correct. He said that I was not present for the beginning of his remarks. That is possible; I was elsewhere when he first started, waiting while that weary measure wound its awful, lengthy way through your Lordships' House. I must say that I was slightly surprised when, eventually, we actually got to the Bill that we were meant to have started on an hour and a half before.
	I hope that the Minister will not spend too much time on the ugliness of the drafting; I put that in by the way. The point that I am dealing with is the supreme unreality of applying performance indicators and having performance targets for anything as complicated and varied as a police operation. Fixing them will be a matter of great grief. I am pleased to hear that it will be a matter for consultation, but those consultations will be either sour or infinitely drawn-out.

Lord Rooker: My Lords, the best answer that I can give to the noble Lord is that we are not inventing the wheel. The Bill does not introduce performance targets or indicators—I must make that abundantly clear. They are already in operation. It is not new. What we have done, for setting the National Policing Plan, is correct an omission that was drawn to our attention by the Association of Police Authorities in respect of a generalised statement about performance indicators. The indicators are already in place, with the co-operation of and in consultation with the Association of Chief Police Officers and the Association of Police Authorities.

Lord Dixon-Smith: My Lords, I have no doubt that we could argue about the detail for a long time, but it would not carry us much further forward. This part of the Bill is, in fact, considerably improved from what it was when we first saw it. That is a compliment to the work of all Members of the House and to the Government. We have done something useful.
	It may be that, on further study, we shall wish to return to the matter. For now, however, we have taken it as far as we can. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 2 not moved.]

Lord Murton of Lindisfarne: My Lords, in calling Amendment No. 3, I should point out that, if this government amendment is agreed to, I cannot call Amendment No. 4, owing to pre-emption.

Lord Rooker: moved Amendment No. 3:
	Page 1, line 8, leave out from "year" to end of line 9 and insert—
	"(1A) The Secretary of State shall lay the National Policing Plan for a financial year before Parliament.
	(1B) Subject to subsection (1C), any such plan must be laid before Parliament not later than 30th November in the preceding financial year.
	(1C) If there are exceptional circumstances, any such plan may be laid before Parliament after the date mentioned in subsection (1B); but it must be so laid before the beginning of the financial year to which it relates.
	(1D) If a plan is laid before Parliament after the date mentioned in subsection (1B), the plan must contain a statement of the exceptional circumstances that gave rise to its being so laid."
	On Question, amendment agreed to.
	[Amendment No. 4 not moved.]

Lord Rooker: moved Amendment No. 5:
	Page 2, line 4, at end insert "and the giving of general directions in relation to any objective so set;
	(ia) the specification, under section 4 of the Local Government Act 1999 (performance indicators), of performance indicators (within the meaning of that section) for police authorities;"
	On Question, amendment agreed to.
	[Amendments Nos. 6 and 7 not moved.]

Lord Rooker: moved Amendment No. 8:
	Page 2, line 16, at end insert—
	"( ) Before laying the National Policing Plan for a financial year, before Parliament, the Secretary of State shall consult with—
	(a) persons whom he considers to represent the interests of police authorities;
	(b) persons whom he considers to represent the interests of chief officers of police; and
	(c) such other persons as he thinks fit."
	On Question, amendment agreed to.
	[Amendment No. 9 not moved.]

Lord Rooker: moved Amendment No. 10:
	Page 2, line 18, at end insert "; and
	'general direction' means a direction under section 38 establishing performance targets for all police authorities to which section 37 applies."
	On Question, amendment agreed to.
	Clause 2 [Codes of practice for chief officers]:

Lord Dixon-Smith: moved Amendment No. 11:
	Page 2, line 27, at end insert "relating to those matters that are not appropriate to be in the public domain"

Lord Dixon-Smith: My Lords, these amendments were put down in advance of our seeing what the Government intended. They reveal a slight difference of opinion as to how such matters should be taken forward. On principle, I think that matters that are suitable to the public domain should go to the chief officers through the police authority.
	The Government have, again, brought forward amendments that will greatly improve the situation and for which I am grateful. This is essentially a probing amendment, designed to move matters forward. I beg to move.

Baroness Harris of Richmond: My Lords, I speak to Amendment No. 12. We welcome the Government's amendments to Clause 2. The codes will rightly be laid before Parliament, and the CPTDA will be required to consult APA and ACPO. We are delighted that the Government have seen the light and been converted into enthusiastic proponents of consultation, not just on that issue but throughout the Bill.
	Although we do not wish to appear ungrateful, we still believe that it is necessary to pursue the amendment that we tabled. There is a significant difference between it and that tabled by the Government. The Government's amendments put the obligation on the CPTDA to consult APA and ACPO. The CPTDA will draft the codes, so that consultation is likely to be about the content or details of what might go in any given code. Our amendment would place on the Home Secretary an obligation to consult the APA and ACPO. That is still necessary because that consultation would be rather different. It would be consultation about whether a code is needed on a particular issue and the general nature of that code. The Government have recognised the significance of that point in their proposed amendments to Clause 7. We shall discuss those later, but I simply draw the House's attention to the fact that the Government's amendments to that clause provide for consultation with the APA and ACPO by both the Home Secretary and by the CPTDA at appropriate stages in the process.
	We do not wish to build in unnecessary consultation processes or bureaucratic procedures. We assume—perhaps the Minister can confirm it—that there is unlikely to be more than a handful of codes in total, so that what we propose should not be too onerous. We seek to ensure that, in deciding how and to what extent to make use of the considerable new powers that he will have under the provision, the Home Secretary consults the tripartite partners and listens to their views.

Lord Rooker: My Lords, I am grateful for the response to the government amendments. If the theme of our debate is to be that the Government have seen the light, I am happy with that. I should say that this is my best effort; there is no way that I can now go back to the Home Secretary. I have done my best.
	From this group of amendments, by and large—I shall put it no more strongly than that—we can see that there is a broad consensus between us on the codes of practice and the requirements for laying codes of practice before Parliament. However, the amendments are not identical. Perhaps I may dwell on the similarities rather than on the differences.
	On the question of consultation, Amendments Nos. 14, 53 and 56 tabled in my name require the Central Police Training and Development Authority—I still do not have a decent acronym for that body—to consult persons whom it considers to represent the interests of chief officers and police authorities and such other persons as it thinks fit. This will ensure that there is always a duty to consult the representatives of chief officers and police authorities, whatever they may be called and however they are constituted. That is the reason why that form of words has been used throughout the amendments and is the reason why we have not used the titles of the two organisations.

Earl Ferrers: My Lords, perhaps I may interrupt the Minister for a moment. I hope that he will not spend too much time exerting himself in trying to find an acronym for the body he has just named. If we have an acronym, no one will understand it. At least one can understand the Minister when he speaks English.

Lord Rooker: My Lords, I am very grateful to the noble Earl. I always try to avoid using acronyms. Earlier I used the acronym NCIS. I used it once, but then I spelt it out because it looks bad to those outside who follow our proceedings.
	I turn to Amendment No. 13, tabled by the noble Lord, Lord Dixon-Smith. The noble Lord made the point that the amendment was tabled before the government amendments, but broadly speaking it seeks to achieve the same end.
	Amendment No. 12, spoken to by the noble Baroness, Lady Harris, would place a duty on the Secretary of State to consult bodies representing chief officers and police authorities, but the effect would be to introduce a further round of consultation with the same people who had already been consulted by the Central Police Training and Development Authority. That would add an unnecessary stage to the process of drawing up the codes of practice. Consultation would be most relevant and appropriate at the point at which the Central Police Training and Development Authority was drawing up a draft code. Therefore the duty to consult properly rests with that authority.
	With regard to the publication of any codes of practice, government Amendments Nos. 15, 54 and 57 provide for codes to be laid before Parliament, subject to a sensitivity test. A code, or the relevant parts of a code, would not be laid before Parliament where to do so would compromise national security, would hamper the tackling of crime or would endanger individuals' personal safety.
	Amendments Nos. 16, 55 and 58, tabled by the noble Lord, Lord Dixon-Smith, are in a similar vein, albeit that they do not contain a sensitivity test. I am perfectly prepared to discuss in detail why some of the probing amendments do not quite fit, but since they are probing it would be futile to go over them, for the reasons already given by the noble Lord. However, I ought to make it clear that Amendment No. 16, which would introduce a requirement to lay the codes before Parliament, if codes cover only issues not appropriate to be in the public domain, we have to ask what would be the purpose of setting down a requirement that they should be placed in the public domain.
	It does not make sense for codes of practice only to cover areas of policing that ought to be kept out of the public domain. The purpose of such codes is to spread good practice in policing and to assist all forces to achieve the standards of the best by using tried and tested methods of policing.
	There will be codes, or parts of codes, which can be placed in the public domain. Therefore we are prepared to lay those codes before Parliament. We see no sense in restricting the making of codes to restricted areas of policing. Obviously there is a need to keep certain sensitive matters out of the public domain. That is readily acknowledged in the existing Police Act 1996. Section 55 of that Act, which relates to the publication of reports by Her Majesty's Inspectorate of Constabulary, exempts from the duty to publish any part of a report where the publication would be against the interests of national security or jeopardise the safety of any person. That is the precedent on which I rely for the sensitivity test set out in the government amendments.

Lord Dixon-Smith: My Lords, I am grateful to the Minister for explaining his amendments and, to a certain extent, for his marginal demolition of ours, which was only to be expected. Again, the Bill has been improved and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 12 and 13 not moved.]

Lord Rooker: moved Amendments Nos. 14 and 15 en bloc:
	Page 2, line 38, leave out "such" and insert "—
	(a) persons whom it considers to represent the interests of police authorities;
	(b) persons whom it considers to represent the interests of chief officers of police; and
	(c) such other"
	Page 2, line 38, at end insert—
	"(4A) The Secretary of State shall lay any code of practice issued by him under this section, and any revision of any such code, before Parliament.
	(4B) The Secretary of State shall not be required by subsection (4A) to lay before Parliament, or may exclude from what he does so lay, anything the publication of which, in his opinion—
	(a) would be against the interests of national security;
	(b) could prejudice the prevention or detection of crime or the apprehension or prosecution of offenders; or
	(c) could jeopardise the safety of any person."
	On Question, amendments agreed to.
	[Amendments Nos. 16 and 17 not moved.]
	Clause 3 [Powers to require inspection and report]:
	[Amendment No. 18 not moved.]
	Clause 4 [Directions to police authorities]:

Lord Dixon-Smith: moved Amendment No. 19:
	Page 3, line 35, leave out "the whole or any part of"

Lord Dixon-Smith: My Lords, here we come to the wretched words on the face of the Bill which deal with the "whole or any part of a force" and "whether generally or in particular". It seems to me that these words are unnecessary. If a part of a force is inefficient then the force is inefficient. We believe that in this part of the Bill a great many words are superfluous.
	A further problem with this part of the Bill is that, as drafted, it confers too wide a possibility for the Secretary of State to direct police authorities. However, if I have understood it correctly, then I am delighted to note that government Amendment No. 23 confines actions taken under this clause to remedial actions as a result of a report. That being the case, once again I welcome the fact that this improvement—this limitation—is being made in acknowledgement of points that were raised in this House during our debates in Committee. Again, in Clause 24, the Secretary of State will be confined to reports or relevant matters.
	Amendments Nos. 30 to 34 apply the same deletions to the wording used in Clause 5. Amendments Nos. 75, 76 and 86 again apply the same deletions both to the National Criminal Intelligence Service and the National Crime Squad. Here I shall follow the good practice of the Minister and set out the names in full, even if it takes a moment longer.
	I accept that those bodies have a different status and therefore they act under different legislation, but I wonder whether, even though that is the case, we should not try to keep in place similar principles throughout the Bill. That is the reasoning behind Amendments Nos. 75, 76 and 86. I beg to move.

Lord Bassam of Brighton: My Lords, as the noble Lord, Lord Dixon-Smith, has made clear, these amendments seek to remove all reference to under-performance being confined to part of a force or in any particular respect rather than in general. They would cover Clauses 4 and 5.
	We take a different view from the noble Lord. As we see it, there is no good reason why the Secretary of State should not be able to require remedial measures—that is what we are referring to here—to be taken in relation to under-performance in a part of a force or in relation to a particular aspect of its work or functions.
	Where under-performance has been identified in a geographical area, such as in a basic command unit or in one particular area of policing—for example, the reduction of burglary—the Home Secretary should be able to stop the rot before it spreads. He should be able to require early and effective remedial action to be taken rather than have to sit back powerless while the performance of the force as a whole begins to suffer.
	This is particularly true of the larger forces. I am sure that the noble Lord will appreciate that in the Met the basic command units can be bigger than some of the smaller forces across England and Wales. Certainly there will be problems in basic command units in London which will affect local service provision, but which will never spread to cause the entire force to be inefficient or ineffective.
	We have to accept that variations exist in large forces. For example, one of the large metropolitan forces saw an overall reduction in crime of 2.2 per cent in the 12 months to March 2001, as well as very welcome reductions in burglary of 13 per cent and in vehicle crime of 4 per cent. Over that same period of time, one of the basic command units within that force saw burglary rise by 2.8 per cent, theft from vehicles rise by 2.9 per cent and the theft of vehicles rise by 16.3 per cent. Those are not impressive statistics. In that force, robbery rose by 13 per cent over the previous year, but in the particular basic command unit it went up by nearly 20 per cent.
	Our argument is simple: the Secretary of State should be able to suggest that that basic command unit be looked at to see what problems exist within it which are particular to its area and not shared across the force. Why should he not be able to insist that remedial action be taken within that area? It compares to using an Armalite where otherwise the Secretary of State would have to use a blunderbuss, which would be entirely inappropriate. Local people in that under-performing area would wish to see—they have a right to see—the very highest standards of policing.
	In Committee, the noble Lord, Lord Dixon-Smith, made the point that the Secretary of State was taking this power unto himself simply for the sake of it. That is not the case. We want to ensure that there is a speedy and effective way of making an early intervention in particular areas without disrupting the activities of a whole force. That is what we seek to achieve. It is appropriate, proportionate, targeted and focused, and it enables close attention to be paid to the particular problems of a small part of a larger force. That is the rationale behind our position.
	I accept that it differs from the position of the noble Lord, but if we were to follow the route he suggests we would end up looking at a whole force area where the problem persists only in a small part of it. That would not be a sensible use of time in trying to put matters right. In view of that explanation, I hope that the noble Lord will reconsider the matter and withdraw his amendment.

Earl Ferrers: My Lords, as I understand it, if something is going wrong in a police service, the Secretary of State can say that it is happening in a particular area and that action should be taken. Is that not the responsibility of the police authority? Why should not the police authority do that as opposed to the Home Secretary? The Government seem to be gathering more power unto themselves.
	It is particularly pertinent that I should ask this because I was responsible for taking the Police and Magistrates' Courts Bill through the House in 1994. We then had a problem in regard to making the police authorities bigger and deciding whether their members should consist of elected or appointed people. There was an appalling row about it. People said that the Government had got it wrong and that the Home Secretary was taking powers unto himself and overriding the elected people. One noble Lord said:
	"all this is part of the continuing destruction of local authorities. It is all part of gathering more power, whatever may be said by the Government about their intentions, into the hands of Whitehall and of Ministers who at the moment will be Conservative but who very shortly, I think, are likely to be Labour. That is an argument that ought to appeal to noble Lords opposite, if nothing else does".—[Official Report, 15/2/94; col. 120.]
	The person who spoke those words was the noble Lord, Lord Callaghan of Cardiff. I was at the butt end of those remarks, which was, in its way, painful.
	The Government are now seeking to do exactly the same. They are gathering unto the Home Secretary the power to tell police services what they should do and why they themselves have not done it. That is a dangerous road down which to go.

Lord Bassam of Brighton: My Lords, I am interested that the noble Earl is now gathering support behind something with which he disagreed some time ago when the argument was put by the noble Lord, Lord Callaghan.
	Let me deal with the noble Earl's point. Yes, we are seeking to ensure that the Secretary of State can make an effective remedial intervention. But, rather than trying to create a wide power to enable the Secretary of State to come in and look only at the whole of a force with the overall objective of looking at a small part of it, we are seeking a narrower provision to enable attention to be paid to a specific part of under-performance in a geographical force area or in a particular service so that the whole force is not disrupted when measures to put right something which is clearly not working are sought.
	We have to look at this problem through the mind's eye of the public. They want to see something which is patently failing put right. How that is achieved may be of secondary interest, but they will not want to see the whole of a police force area disrupted when changes are required only in a small part of it. That is why we seek this specific provision. If we were to go along the course promoted by the noble Lord, Lord Dixon-Smith, we would be undermining an important measure to improve the quality of policing in a particular area. I cannot believe that the public or your Lordships would support that proposition.

Earl Ferrers: My Lords, the Minister said that he was surprised that I was now taking the view that the noble Lord, Lord Callaghan, had taken some years ago. I should remind him that I was obliged to take back the first eight clauses of my police Bill because it was considered too dictatorial and too government oriented. The noble Lord should not be too worried if he has to take back a few clauses.

Lord Dixon-Smith: My Lords, in this House we should not allow the noble Lord to get away with the implication that the issuing of directions or codes of practice by a Minister improves policing. What it does do is satisfy the egos of the relevant government departments and gives them the feeling that they are doing something. There is a clear distinction.
	However, as a result of later amendments, the Bill will be improved by the time we have finished our proceedings. Therefore, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 20 and 21 not moved.]

Baroness Harris of Richmond: moved Amendment No. 22:
	Page 3, line 41, leave out from "State" to "to" in line 42 and insert ", after consulting the police authority responsible for maintaining that force, may direct that authority" .

Baroness Harris of Richmond: My Lords, in moving Amendment No. 22, I shall speak also to Amendment No. 27, which concerns Clause 4 and is the substantive amendment on which I wish to speak. I shall speak also to Amendments Nos. 35 and 38—it would have been better had they been grouped separately—which deal with similar issues under Clause 5, and to Amendments Nos. 59, 62 and 67 and their application to the National Criminal Intelligence Service and the National Crime Squad. I hope that is clear.
	Amendment No. 27 stands in my name and that of my namesake and former APA colleague, the noble Lord, Lord Harris of Haringey. He regrets that he is unable to be in his place today. It stands also in the names of my noble friends Lord Dholakia and Lord Bradshaw.
	I followed your Lordships' discussions in Committee very carefully and with close interest. It was striking that a similar amendment to this one, tabled by the noble Lord, Lord Harris, received widespread support. Even the Minister felt moved to remark that the noble Lord, Lord Harris, had done the House a service in tabling the amendment—which was praise indeed—and he undertook to take away a number of the issues raised in the debate on Clause 4. True to his word, he has come back with substantive proposals and we warmly welcome government Amendments Nos. 23, 24, 25 and 42. They considerably improve the provisions of Section 40 of the Police Act 1996, on which Clause 4 is based.
	Welcome though the amendments are, Amendment No. 27 and Amendment No. 41, which relates to Clause 5, are designed to cure a rather different problem—the problem being Clause 5 itself. Indeed, Amendment No. 27 aims to help the Government to find a way through the difficulties that they have created for themselves in the clause. I trust that your Lordships will bear with me if, in addressing Amendment No. 27, I pre-empt some of the discussions that we may have later about Clause 5, about which I shall speak only briefly.
	This amendment is intended to replace Clause 5. I hope that that is clear. Clauses 4 and 5 both give the Home Secretary powers to intervene directly where a force or part of it is identified as ineffective or inefficient. Clause 4 provides for the Home Secretary to make such intervention through the local police authority. Under Clause 5, the Home Secretary would intervene directly in the force, presumably using his new police standards unit. That is the fundamental objection to Clause 5. It represents a substantial change in the current tripartite arrangements.
	The noble Lord, Lord Harris of Haringey, put the point admirably in Committee. The amendment seeks to replicate part of what is proposed in Clause 5; but it does so in such a way as to support and enhance the tripartite relationship rather than undermining it. The Minister has assured us that it will not be the intention of the Home Secretary to intervene in and seek to micro-manage forces. He nevertheless intends to impose targets, time-scales and action plans. The amendment makes that the responsibility of the local police authority. After all, that is precisely what the police authority is there to do. However, the amendment recognises the Home Secretary's legitimate interest and gives him a chance to work with and through the police authority to put matters right. The amendment does away with the need for Clause 5, unpalatable as it clearly is to your Lordships.
	I read with considerable interest, and no small surprise, the Minister's response to the amendment in Committee. I do not want to put the Minister on the spot, but his response bears some examination. We may find that it helps us to identify whether our amendments can resolve the problems which both Clauses 4 and 5 seek to cure.
	The Minister's objection to the amendment was that the police authority should be kept away from operational matters because it administers funding. He went on to say that this represented a fundamental difference between police authorities and the Secretary of State, who, he suggested, could therefore have a role in operational matters. That concerned me somewhat. It seemed to suggest a fundamental misunderstanding of the role of police authorities and the concept of operational independence.
	I shall make three brief points—although I could make many more. First, the Home Secretary is responsible for the overall allocation of resources to the police service. His role at national level is the same as that of the police authority in allocating resources locally. Secondly, the police authority's role as set out in the Police Act 1996 is not limited to administering funding. It is the job of the police authority to ensure that the style and nature of local policing reflects the views of local people; to set the strategic direction for local policing; to decide what the local policing priorities should be—including operational policies; and to monitor and manage the forces formally.
	Thirdly, I am absolutely confident that everyone in the House will agree that the operational independence of the police service is the bedrock of our policing system. None of us wants that undermined in any way. The Home Secretary is in exactly the same position as the local police authority. The Home Secretary must not interfere in operational decisions on particular cases or events. They are a matter for the chief officer. But both the police authority locally and the Home Secretary nationally have a role in setting operational policy. Therefore, it is not clear to me why the powers available to the Home Secretary under Clause 4, as supplemented by the amendment, are insufficient; or why the Home Secretary should bypass the police authority and intervene directly in forces.
	The Minister has said previously that the Home Secretary wants more levers to impact on police performance, and that he needs them because of variations in performance across forces and BCUs. There were a great many discussions in Committee about whether the Minister was in a position to make those judgments. We all know the difficulty of comparing like with like. But that said, we all want our local communities to have the best possible policing services. We can do that without undermining the constitutional settlement and the tripartite relationship.
	Local police authorities are responsible for managing and monitoring local police performance. It is they who must answer and are accountable on the ground, day in, day out, to their communities for the policing services provided. The amendment enables the Home Secretary to work through and with the local police authority to improve performance if there are deficiencies, and to give his views on what needs to be done. Ultimately, the amendment would ensure that the action taken reflected the needs of local communities which the local police authority and the chief officer are best placed to judge.
	I am sorry to have taken up so much time, but we are dealing with the most critical part of the Bill. I hope that your Lordships will agree that the Government's proposal and the constructive alternatives that we have sought to bring forward should be fully explored. I beg to move.

Lord Dixon-Smith: My Lords, before the Minister responds, perhaps I may speak briefly, for the record, to my amendments in the grouping.
	The proposal in Amendment No. 40—repeated in Amendments Nos. 83 and 93—provides an amendment to government Amendment No. 39 and other instances where the provision applies. It is a repeat amendment which will appear six or seven times in the Bill.
	Amendment No. 39 provides that,
	"If the Secretary of State exercises his power to give a direction . . . he shall prepare a report . . . and . . . lay that report before Parliament".
	That is an enormous improvement and such a provision is very welcome. However, proposed new subsection (13) states that any such report,
	"shall be prepared at such time as the Secretary of State considers appropriate; and . . . may relate to more than one exercise of the power".
	The provision is all right; but the words,
	"at such time as the Secretary of State considers appropriate",
	are an open-ended time limit. Indeed, it is not a time limit at all. The report could be prepared—or it might not be prepared—before a general election. There might be a change of government and all kinds of things might happen. We ought, as a matter of precaution, to place a reasonable time limit on the preparation of the report. The amendment suggests six months as a reasonable time limit for what is a fairly routine matter. I hope that the Minister may find it possible to agree with the principle behind the amendment.
	The other amendments in the group apply the proposal to the National Criminal Intelligence Service and to the National Crime Squad. We believe that that is perfectly reasonable. We believe also that the director of the National Criminal Intelligence Service ought to have the agreement of his service authority before putting in place any plan to implement a direction from the Home Secretary. This, again, is a matter of natural, good internal administrative relationships. The Government could concede these amendments without any difficulty or embarrassment. I hope that they will. I beg to move.

Lord Rooker: My Lords, given not just the number of government and opposition amendments in the group, but the debates we had in Committee, I imagine that many noble Lords regard this as the most important debate today. I shall set out the Government's approach to the points made in Committee. We have taken issues on board and have tried to find an acceptable solution indicating exactly what we are seeking to do. A further group of government amendments, not contained in this group, remove the words "operational procedures and practices" from Clause 7. Those words sent the wrong signals. That is not what we are about. We think that the content is OK, but even the title gave all the wrong vibrations when we discussed the issue. To the extent that we have tried to get the message, I hope that we have come up with a package that can be viewed as a whole, and I trust that your Lordships will see that we are at one.
	The amendments that would require the Secretary of State to consult the National Criminal Intelligence Service or the National Crime Squad's service authority before issuing a direction are grouped with some lengthy amendments in my name. Some of the amendments tabled by the noble Lord, Lord Dholakia, and others are superseded by the government amendments. I shall set out the broad thrust of our amendments and comment on the others.
	As we explained in the White Paper, it has always been the Government's intention that the use of the direction powers in relation to police authorities, chief officers, the National Criminal Intelligence Service and the National Crime Squad would be governed by a protocol, which would set out clearly the steps that must be taken before the Secretary of State could issue a direction.
	Noble Lords from all sides—including those behind me, to my left and my right—expressed grave reservations about the permanence of such a protocol, even were it to be negotiated and signed up to by all three of the tripartite partners. That is why we have tabled amendments to place those steps on the face of the Bill. The key amendment in the group is the lengthy Amendment No. 42, which inserts a new clause after the present Clause 5. It governs the procedures for giving directions under the revised Section 40 of the Police Act and the new Section 41A. In shorthand—lawyers should not take too much notice—the new clause inserted by Amendment No. 42 will govern how the Home Secretary proceeds.
	The amendment was put together as a result of your Lordships' deliberations in Committee. It requires the Home Secretary to put the evidence that a force or a part of a force is not efficient or effective to the chief officer and the police authority and to afford them the opportunity to make representations. The Home Secretary will be obliged to have regard to any such representations.
	The amendment further requires the Home Secretary to afford the chief officer or the police authority the opportunity to put in place their own remedial measures before they are directed to do so. It is almost a long stop to a long stop. As I have said repeatedly, this is a last resort action by the Home Secretary and it would constitute almost a failure of local policing by the chief officer, the force or the police authority for the whole of the force or particular parts or functions. We want them to put their own house in order. It would not be a surprise to the locality that there was a problem.
	The amendment provides a further impetus on the face of the Bill to give all the bodies involved on the ground the chance to put their own remedial measures—not the Home Secretary's—into force before they are directed to do so. The Home Secretary would move to a direction only if the measures proposed by the police authority or the chief officer were considered inadequate or if those measures failed to remedy the poor performance. Further procedural steps could be laid down in regulations, subject to affirmative procedure. Matters that could not be dealt with on the face of the Bill and had to done through secondary legislation would be dealt with by the affirmative procedure.
	Also in response to arguments made in Committee, amendments have been tabled to amend the current Clause 5 to ensure that progress reports on any action plan from the chief officer must be submitted to the police authority as well as to the Home Secretary. I think your Lordships will agree that we are proposing a robust and effective system to ensure that powers of direction cannot be used lightly. The proposals will not enable any Home Secretary to operate on a whim or a hunch. We have said that that cannot happen and that we do not want it to happen, but we have repeatedly been told that perhaps not all future Home Secretaries will be as nice and benign as the present Home Secretary. We are locking in that process. The powers of direction cannot be used lightly. We have given assurances time and again that they will not be used lightly and that provision is now being put on the face of the Bill. These are powers to be used in the last resort when all other mechanisms have failed—and are clearly seen to have failed—to deliver at local level. That is why we have no problem in transparently operating the powers by a clearly set out process that gives the police authority or the chief officer every opportunity to correct the under-performance at issue.
	We are also happy to be held to account for those powers. That is why I propose that the Home Secretary—or Scottish Ministers, where they have the power to direct in relation to the National Criminal Intelligence Service—should be required to report the use of those powers to Parliament. I accept that that is important. My colleagues in government agreed in discussion that being accountable to Parliament means more than just answering Questions or being subject to written Questions and Statements. There must be a requirement to report on the use of the powers to Parliament. We intend to produce the reports as early as is practical after exercising the powers of direction, if those powers are used.
	However, the opposition amendments would require the Home Secretary to prepare his report in six months. I am not nit-picking about a technical deficiency. Under the amendments, he would not be required to lay the report before Parliament within six months. That is an important point. If the powers are ever used and there is a sniff that the report to Parliament has been delayed for what I might call political purposes, all hell will break out in both Houses of Parliament, given the nature of the amendments under consideration. The amendments spoken to by the noble Lord, Lord Dixon-Smith, would not lock in the Home Secretary in respect of the reports being laid before Parliament.
	I respect the absence of my noble friend Lord Harris. His initial amendment was very important and gave us an opportunity to look at another way of dealing with a very difficult issue. However, we think that Amendment No. 27 is the wrong approach to use of the powers. It would be more time-consuming, routing the direction and the action plan via the police authority, rather than the Home Secretary agreeing the form of direction and the contents of the action plan in consultation with the police authority. There are two stages to the process under Amendment No. 27. Two individual parts of the tripartite partnership sending action plans back and forth for revision and amendment has the potential for delay in the delivery of the plans. Our fellow citizens want those action plans to be delivered if it has been accepted that they are required.
	The Home Secretary has a strategic overview which the police authority does not have, being, as it is, closely involved with the police force. Once under-performance reaches the stage at which directions are necessary—when there is an up-front and knowing failure which the local public will know about—the police authority will have already had its chance to drive up performance. As I said, the power is for use only in the last resort. We have also built in a further stage in which the police authority and chief police officer can propose their own way of delivering an action plan.
	I have not had a chance to discuss the government amendments with my noble friend Lord Harris of Haringey, but I hope that his concerns about the police authority's involvement in the process are dealt with in the proposed new clause in government Amendment No. 42.
	As to the remarks of the noble Lord, Lord Dixon-Smith, in relation to some of his later amendments, the Home Secretary will not be requiring the directors-general of the National Criminal Intelligence Service or the National Crime Squad to implement impractical action plans. Moreover, the government amendments build safeguards into the procedure for issuing directions to ensure that the directions and action plans are carefully thought through in terms of deliverability. Those safeguards will provide the directors-general of the two services and the service authorities with an opportunity to make representations and proposals to the Secretary of State before he issues a direction.
	Therefore, like police authorities and local chief officers, the other two services will have an opportunity to propose their own action plan. It would be in no one's interest for the Home Secretary to make unreasonable demands of the National Criminal Intelligence Service or the National Crime Squad. He will therefore consult with both organisations before issuing any directions. That is why there is no need to specify in the Bill that a direction must be achievable before it can be issued. As I said, the Home Secretary will work with the directors-general and the service authorities to ensure that a direction is achievable before it is issued; it would be too late to do so after it is issued. However, the Home Secretary has a right to expect a direction, once issued, to be implemented. Amendments Nos. 81 and 91 would subvert that expectation. As such, I do not commend them to the House.
	I freely admit that our discussions in Committee were of considerable help to myself and my colleagues in trying to enshrine the Government's intention, rather than what people believe is our intention, in statute. I also freely admit that things are not always drafted as clearly as they could be. Moreover, even with the best will in the world, Ministers can no longer simply stand up and say, "I am a Minister. Believe me and trust me". Life is no longer like that. The situation was the same before I became a Minister, but I am now free to admit it. We are a mature and alert democracy, and the public should always be encouraged to question and to be suspicious of those in authority.
	I hope that, because of the way in which we have locked down these issues in this group of amendments, chief police officers will be confident that the Home Secretary is not seeking to do their job. I also hope that police authority members will be confident that they perform an extremely valuable function at the service level of the 43 police authorities. The Home Office is in no way seeking to do their job; that is not our intention. The amendments provide last-resort powers. Moreover, we have built in further checks and balances in their use; we have provided a long stop to the long stop. I genuinely believe that we have used our very best endeavours in developing this package to try to meet the demands that noble Lords made in Committee. I therefore hope that the government amendments in this group will find favour with noble Lords.

Lord Renton: My Lords, the Minister has obviously had second thoughts—as presumably has the Home Secretary—about Clause 5. Amendment No. 42 is obviously an attempt by the Government to mitigate the unpopularity, and indeed the rather resolute provisions, of Clause 5. However, I implore the Minister to bear in mind that Amendment No. 42 really does need to be mentioned in Clause 5. Clause 5 should at least include a phrase to the effect of, "Subject to the provisions of what will become Section 41B". Without such a cross-reference, there will appear to be a conflict in the Bill.

Lord Rooker: My Lords, far be it from me to talk about Bill drafting to the noble Lord, but I should make it clear that Clause 5 will become a new section in the Police Act 1996. The amendment will become Section 41A of the 1996 Act, and it has the heading,
	"Powers to give directions to chief officers". The proposed new clause in Amendment No. 42 will follow that new section and is headed,
	"41B Procedure for giving directions under sections 40 and 41A".
	Therefore, there is a direct reference in Amendment No. 42 to Clause 5.

Lord Renton: My Lords, I understand that. I have understood it throughout. The point concerns the very drastic powers given to the Home Secretary in what is intended to become new Section 41A of the 1996 Act. As a matter of drafting, and in accordance with our usual practice, Clause 5 should at least contain the phrase, "Subject to the provision of Section 41B of the 1996 Act."
	Although I believe that the suggested minor change would help, I go further. Frankly—but without going into a mass of detail—the provisions of Amendment No. 42 are in conflict with the provisions of proposed new Section 41A as set out in Clause 5. I think it desirable for the two clauses to be redrafted not only so that they dovetail better, but to mitigate the very considerable powers expressed in Clause 5 which really do conflict with what the Minister has just proposed. I am trying to be helpful. It really would be better if we included in the legislation something along the lines of what I have just proposed.

Lord Rooker: My Lords, I accept the noble Lord's comments. However, at the risk of repeating myself, when the two new clauses are read together, as they will be in the 1996 Act, it will be clear that one is 41A and the other is 41B. Not only will the title of the new Section 41B refer to new Section 41A, but the very first line of 41B effectively states that the Secretary of State cannot operate that new section unless he follows the procedure laid out in new Section 41B. There is a direct link between the two. In other words, Clause 5—which has been such a contentious issue in this House—cannot operate unless the procedures specified in the subsequent section are followed.
	I am always happy to take advice, as is the parliamentary draftsman. In fact, I know that the draftsman is happy to take advice from the noble Lord, Lord Renton. I give my word that if the provisions require any tidying up in relation to drafting or other technical matters, that matter will certainly be looked at. However, I also make it clear that Clause 5—which itself is amended in my amendments in this group—cannot operate unless the procedures laid out in Amendment No. 42 are followed. That is clearly stated at the beginning of the amendment.

Baroness Harris of Richmond: My Lords, I have listened with great interest to the Minister. I am sorry that he has difficulty with the suggestion that police authorities should be consulted. He spoke about going backwards and forwards and said that it would be too time consuming. If there were failings, police authorities would have had their doors battered down by their local communities. The Minister's remarks about going backwards and forwards would have made no difference. Police authorities would simply have dealt with matters at an earlier stage. I wish that the Minister would reassure his right honourable friend the Home Secretary about that. Where have failings occurred? Where does he think they might occur?
	The provision is a sledgehammer to crack a nut. I am deeply disappointed by the Minister's remarks that the Home Secretary can intervene and direct the local police authority under Clause 4. Our suggestion is a much better way of dealing with these matters. Under Clause 5 the Home Secretary will intervene directly, which is not the best way forward. I am disappointed. I beg leave to withdraw the amendment, but warn the Minister that we shall probably return to the matter at Third Reading.

Amendment, by leave, withdrawn.

Lord Rooker: moved Amendment No. 23:
	Page 3, line 42, after "such" insert "remedial"

Lord Rooker: My Lords, I shall speak also to the amendments in this group which are in my name. Amendments Nos. 24, 25, 60, 61, 63 to 66 and 68 to 71 are intended to define better the sorts of measures that can be included in the direction to police authorities.
	The key phrase, which goes to the heart of what we discussed in Committee, is that the measures must be remedial; they must be about putting right what the inspection report has identified as being wrong. The amendments also specify that the remedial measures must refer only to matters identified in the report as being related to the under-performance identified by the inspectorate, or to matters that the Secretary of State believes are relevant to the matters identified by the inspectorate.
	I make it absolutely clear that it is our intention that directions will be used to correct under-performance and that this is not about the Home Secretary micro-managing individual police forces on a day-to-day basis. Such directions are intended to remedy a problem. That is the key point to make. In addition, because we are committed to the use of these powers being open and transparent, we propose that the Home Secretary should report his use of the direction-making powers to Parliament. I shall not repeat what I said on the previous group of amendments.
	Your Lordships have tabled amendments to this provision and we are prepared to accept that reports on the use of powers should be laid as soon as practicable after the exercise of the power. However, the amendments, as worded, would not achieve what they are intended to achieve. They would not require the Home Secretary to lay reports before Parliament within six months. They require only that the reports are prepared within six months. The Bill would be meaningless were we to accept these amendments.
	In that spirit, it is open to your Lordships to table amendments at a later stage. We are putting the emphasis on remedying a problem; they must be remedial measures. That shows that we are not attempting to manage the day-to-day operations of the police service.

Lord Dixon-Smith: My Lords, the Minister has raised the issue of the timing of those reports and has suggested that my amendment does not require the reports to be laid before Parliament within the time limit. I accept that technical criticism of the drafting. If the Minister can give an assurance that the reports will be laid before Parliament within six months, it would spare us all the necessity to table further amendments at Third Reading and might save us all a little time. Will the Minister consider that suggestion?

Lord Rooker: My Lords, this is my best effort. I am not saying that everything is perfect. We are prepared to accept that reports should be laid as soon as is practicable after the exercise of the powers. If your Lordships are not satisfied with that and we can find a form of words, I shall be happy to grovel to my right honourable friend and say that I weakened in a moment of ecstasy. It would be to everyone's satisfaction if we were to get the words right. I shall certainly consider the matter, but I make no promises for Third Reading.

On Question, amendment agreed to.

Lord Rooker: moved Amendments Nos. 24 and 25:
	Page 3, line 43, at end insert—
	"(2) Those remedial measures must not relate to any matter other than—
	(a) a matter by reference to which the report contains a statement of opinion falling within subsection (1)(a) or (b); or
	(b) a matter that the Secretary of State considers relevant to any matter falling within paragraph (a)."
	Page 3, line 43, at end insert—
	"(3) If the Secretary of State exercises his power to give a direction under this section in relation to a police force—
	(a) he shall prepare a report on his exercise of that power in relation to that force; and
	(b) he shall lay that report before Parliament.
	(4) A report under subsection (3)—
	(a) shall be prepared at such time as the Secretary of State considers appropriate; and
	(b) may relate to more than one exercise of the power mentioned in that subsection."
	On Question, amendments agreed to.
	[Amendments Nos. 26 and 27 not moved.]
	Clause 5 [Directions to chief officers]:
	[Amendments Nos. 28 to 35 not moved.]

Lord Rooker: moved Amendments Nos. 36 and 37:
	Page 4, line 41, leave out from "making" to "of" in line 42.
	Page 4, line 43, after "plan" insert "to the Secretary of State and to the police authority maintaining the force in question;
	( ) provision as to the times at which, and the manner in which, any progress report is to be made;"
	On Question, amendments agreed to.
	[Amendment No. 38 not moved.]

Lord Rooker: moved Amendment No. 39:
	Page 5, line 15, at end insert—
	"(12) If the Secretary of State exercises his power to give a direction under this section in relation to a police force—
	(a) he shall prepare a report on his exercise of that power in relation to that force; and
	(b) he shall lay that report before Parliament.
	(13) A report under subsection (12)—
	(a) shall be prepared at such time as the Secretary of State considers appropriate; and
	(b) may relate to more than one exercise of the power mentioned in that subsection."
	On Question, amendment agreed to.
	[Amendment No. 40, as an amendment to Amendment No. 39, not moved.]

Lord Dixon-Smith: moved Amendment No. 41:
	Leave out Clause 5.

Lord Dixon-Smith: My Lords, it was quite coincidental, and not by arrangement, that a report was issued last week by the London School of Economics and the South Bank University about crime and disorder in London. The first paragraph states:
	"Narrow, centrally imposed priorities are creating a growing gap between what Londoners expect of the police and what they get. Unless the Metropolitan Police can be more responsive to the needs of local people, it will lose the community support it needs to tackle crime effectively".
	I regret that I have been unable to get the full report, but the summary states:
	"One important factor has been the unintended consequences of the performance management systems that were imposed on the police throughout the 1990s. Quantitative performance targets were set by successive Home Secretaries, by HM Inspectorate of Constabulary and by the Audit Commission; these generally gave primacy to crime-fighting objectives at the expense of order maintenance. Especially in the 1990s they also imposed the same priorities across widely differing areas regardless of variations in crime problems. This limited the capacity of local police to prioritise according to local need. If the flexibility of the MPS to respond to local problems was constrained by central government initiative, the problem was compounded by the high degree of centralisation in the MPS decision-making. Borough commanders were responsible for areas as large as some provincial forces"—
	as the Minister has already said—
	"but with far more intense problems of crime and disorder. Yet at the time of fieldwork they had limited scope to use their own discretion to tailor their resource allocation to local need".
	Clause 5 takes the business of central administration of what are essential local services too far. The truth of the matter is that the Home Office is in a muddle. That academically-based report highlights the difficulties of the police service. The police service is over-administered; it is having difficulty with policing. Regrettably it seems to be ineffective; regrettably it is not perceived to have adequate detection rates in criminal matters; regrettably it is not effectively preventing crime because it has not got time; and regrettably, as a consequence of all of that, it produces low conviction rates in the courts.
	I sometimes think that if the Home Secretary were honest, he would be grateful that the police were achieving low conviction rates. The prison population is at its highest level ever and the prisons are bursting at the seams. Quite frankly, if the police were to double their performance rate and the consequence was that conviction rates were doubled, there would be nowhere to put the criminals.
	One can look at other aspects; for example, the asylum services. We read in our Sunday newspapers that asylum seekers who are supposed to stay in this country regularly take trips across the Channel for vacations or family weddings. That system is not working properly. The Government's strategic services, which are responsible for providing the systems, are not working. Within that, in Clause 5 we see the legislative tentacles of the department stretching down desperately seeking something small enough to control.
	We believe that Clause 5 is wrong. There are jobs which central government can and should do, and there are jobs that they should not do. There is nothing that can be done from an office in Whitehall which will affect things dramatically on the streets, be it in London, Birmingham or even my local town of Braintree. Everywhere the circumstances are different. I accept that the Minister has done his best to ensure that the actions taken under Clause 5 would only be taken as a last remedial power, a long-stop to a long-stop, having given the local bodies the incentive, which already exists, to put matters right in the first place.
	If we accept the new management systems, we will find the management information which is available is a recent phenomenon which was not available to police authorities or chief constables in earlier days. So those systems could not operate more quickly than the Home Office is now intending. Clause 5 is therefore completely unnecessary. It goes too far. It is taking central administration to the point where it is beginning to prevent the effective performance of these essential services.
	Another report was published only one week ago saying more or less the same thing about the health service. This is a lesson we all need to learn fast and seriously. We have therefore come to the conclusion that the only sensible way of preventing this excess of action, which is damaging, is to delete Clause 5. I beg to move.

Lord Dholakia: My Lords, we have made abundantly clear throughout the Committee stage and at Second Reading that it is our view that Clause 5 is unacceptable. We are therefore delighted to support Amendment No. 41 in the names of the noble Lord, Lord Dixon-Smith, the noble Viscount, Lord Bridgeman, myself and my noble friend Lord Bradshaw.
	Clause 5 threatens the very basis of our tripartite system of checks and balances by placing too much power in the hands of the Home Secretary. I listened carefully in the earlier debate about the long-stop and the long-long-stop about which the Minister talked. But we have to be careful because the tripartite system has been constructed to ensure that no one party has complete control over policing. It is a unique system and works very well. That is not to say that the tripartite relationships may not be slightly adjusted from time to time, and the previous Home Secretaries have rightly done so. We recognise that that may be so and will work constructively with the Government to achieve the changes that are needed.
	But Clause 5 goes too far. It rebalances the tripartite relationship in a way which places too much power in the hands of the Home Secretary. It diminishes local influence, local accountability and local control. The tripod which has stood the test of time is now to be removed.
	Clause 5 allows the Home Secretary effectively to control local operational policy, despite the fact that the word "operational" has been questioned again and again. It empowers the Home Secretary to direct exactly what the chief officer or BCU commander must do through specifying the contents of action plans, targets and time-scales. It provides for the chief officer to report directly to the Home Secretary and it gives the local police authority, whose job it is to monitor and manage police performances, little say in the process. The police authority will only have to be consulted on the action plan, not agree it, and thus will have little say over the targets, time-scales or resources to be applied to the problem which the Home Secretary has decided needs to be solved. The authority will be copied into progress reports, but will have no effective role in managing performance.
	We have already indicated that in bringing forward their amendments we recognise that the Government were trying to be responsive to the concerns rehearsed in earlier debates. But they do not address the fundamental problem with Clause 5; that is, that it subverts the existing tripartite relationship. I do not see how anyone can argue that that is not a radical change in our system of policing.
	We heard in Committee the Minister's contention that this radical change in our system is needed because of the wide variations in police performance throughout the country. Various statistics were bandied about. But we all know that statistics can be used to support any case where needed.
	We are fully behind the Minister on one point. We agree that all our communities are entitled to the best possible policing. We entirely support driving up police performance. We do not want to see postcode policing either. But we have to look at what the Minister is proposing and whether it will solve the issue.
	There was an interesting exchange at Committee stage between my noble friend Lord Phillips of Sudbury who, sadly, cannot be here today, and the Minister. My noble friend asked why the Minister thought that the Home Office could do better than local police authorities and forces. The Minister's response was,
	"could the Home Office do it worse?"
	Most of us believe that it could happen. He is not accountable day in and day out in the way that local police authorities and chief officers are to their communities. Where there are variations in performance we need to motivate local police authorities and forces to find solutions with their communities, not send in civil servants from Whitehall.
	The Minister has assured us time and again that this is the nuclear option; the power of last resort. But Clause 4 already gives the Home Secretary all the power he needs while preserving the national/local balance of control over policing. We believe that our amendment to Clause 4 is the solution.
	But given the establishment of the Police Standards Unit and experience elsewhere in government, it is hard to believe that the Home Secretary will not be tempted to use the new powers available to him.
	But this would have serious and unwelcome ramifications for local policing. Our system is unique in giving local people a strong voice in how they are policed. This is critical to policing by consent. We do not want to see our police under the control of central government or their activities politicised, which is what Clause 5 could ultimately mean.
	We all want to improve local policing in our communities. No one disagrees with the Government about that. The question is how best to achieve that. We urge the Government to think again about how best to secure those improvements.
	A partnership approach which builds on the relative strengths and responsibilities of local police authorities working with their forces and their communities is likely to prove more successful than any direction from Whitehall.
	I return to a very important point made by the noble Lord, Lord Dixon-Smith. Earlier in the debate I mentioned the report Policing for London which the noble Lord cited. The study follows the one carried out by the Policy Studies Institute about 20 years ago. The important theme in the report is that increased central control over the police does not guarantee more effective policing.
	There has been an understandable sense of urgency on the part of successive governments to get to grips with crime and disorder and reforming the police is an important element in all this. But the risks and costs of the different options need to be publicly aired and properly discussed. We have done that at Committee stage. Centralising the policing function is not an option which we would approve. There is too much at stake if we get it wrong.

Lord Borrie: My Lords, perhaps I may intervene briefly before the Minister responds. During Committee stage noble Lords on the Conservative and the Liberal Democrat Benches made a number of important points in relation to Clause 5, the power to give directions to chief officers. As the Minister explained and everybody agreed, it was a power that would only be used in the last resort. It was to be used if a police force, or part of it, were inefficient or ineffective or if it would become so unless remedial measures were taken.
	But there were concerns, especially those expressed then and a moment ago by the noble Lord, Lord Dholakia, that the involvement of central government and the Home Secretary with the chief of police direct was a severe interference with the tripartite system. While some very strong concerns were expressed at Committee stage, I do not believe that either the Conservative or Liberal Democrat Benches have made out a case today in the light of Amendment No. 42, which the Minister has already explained but which we have not yet reached.
	That is an example of the working out of the tripartite system and it is not in any way an attack on it. It involves giving every opportunity there could possibly be to the police authority in the first place and to the chief officer of police in the second, to make representations and proposals and to have them considered by the Home Secretary. In the light of that amendment, if it is accepted, there is no way in which anybody could seriously argue that it was a great attack on the tripartite system or the arrival of centralised power in the sole hands of the Home Secretary. If Amendment No. 42 is accepted, and it is a form of centralisation, it is an incredibly modest one, which hardly deserves the attack that has been maintained from the Committee stage to this Report stage when we have this important other amendment in front of us.

Lord Elton: My Lords, when one wants to decide against whom an army is marching one looks to see in which direction the guns of its tanks are pointed. It seems to me that this clause is a tank. There has been an elaborate effort to camouflage it. There have been very praiseworthy efforts to hedge about its use. I recognise what the Minister has done and the difficulty he has no doubt had in persuading his right honourable friend and those who advised him. After three years in their company at the Home Office I hold them in high regard.
	But in this respect I do not believe that the men at Whitehall know best because the tank is still pointing its gun at the solitary figure of the chief officer of police. The Secretary of State can tell his police authority what he is about and take advice from anybody. But in the end he has opted not to use the powers under Clause 4 and deal through the other part of the tripartite arrangement, which consists of people with a democratic responsibility, but to deal direct with somebody appointed as a public servant. He will find himself staring down the barrel along which is squinting the Secretary of State, the Permanent Secretary, the Under-Secretary and the Assistant Secretary, and all the authorities of the state who can wield their power on him.
	I do not believe that the camouflage, even that expressed in what the noble Lord, Lord Borrie, said, actually conceals the fact that the gun is pointing at the chief constable. He should have the support of his authority and it should have a voice and a role in this matter, not merely to be consulted but to be the body at which the gun is pointed. I stand by my noble friend's proposition that this clause should not stand part of the Bill.

Baroness Harris of Richmond: My Lords, perhaps I can help the noble Lord, Lord Borrie. I thank the noble Lord, Lord Elton, for putting his concerns so succinctly on this matter. I wish to add a few words based on my past experience as chair of my local police authority. I was a member of the National Crime Squad Service Authority and also deputy chair of the National Association of Police Authorities.
	In my view Clause 5 creates more problems for the Home Secretary than it could ever solve. At earlier stages the Minister told us that the Home Secretary believes that the tripartite relationship means that he gets all the blame. Police authorities have all the money and chief officers have all the power. I find it somewhat worrying that after 10 months in the job the Home Secretary seems to have what can only be described as a distorted view of the governance of policing in this country.
	From the local perspective it is the other way round. The Home Secretary has the money and power while police authorities and chief officers struggle to provide a genuinely local policing service which meets the needs and aspirations of their communities.
	My colleagues have already made clear our fundamental objections to Clause 5 and the equivalent provision in Schedule 1(4) which relates to the National Criminal Intelligence Service and National Crime Squad. Taken with the rest of Part 1 of the Bill and the new powers that the Home Secretary proposes to give himself elsewhere in the Bill, it radically shifts control of policing away from local people and communities to Whitehall.
	We are told that the powers in Clause 5 are the last resort and that they are needed to drive up poor performance to the level of the best. As far as I can see, the Government have given us no hard evidence to show why such powers are necessary or in which circumstances they will be used. We have already discussed the extensive powers available under Clause 4. Can the Minister give a concrete example of why the powers under Clause 5 are needed and how they will be used?
	While the Minister considers that, I shall turn to the recent street crime initiative. The Government are concerned about rising levels of street crime as I am sure are all noble Lords. The Prime Minister has instigated weekly crime summits involving key players from the Association of Police Authorities, the Association of Chief Police Officers, the Criminal Prosecution Service, the courts and other government departments such as the Department of Health and the Department for Education and Skills. The 10 forces identified as having the worst problems in this area are already developing action plans to tackle the situation. That is being undertaken at the moment without the powers proposed under Clause 5. I leave the Minister and your Lordships with a question: why on earth do we need Clause 5?

Lord Corbett of Castle Vale: My Lords, I apologise for not being able to attend the debate earlier, although I sat through many of the debates on this matter on the previous occasions when it was discussed. Your Lordships' House is rightly concerned—I share the concern—about any attempt to try to centralise control of the police. With the greatest respect to your Lordships, I fail to understand much of the argument. Perhaps I may illustrate my point as simply as I can.
	The noble Lord, Lord Dholakia, said that there should not be policing by postcode, with which I agree. I suggest that the powers being sought in Clause 5 are to try to achieve that. To that extent, it is on the side of local policing. The report, Policing for London, to which the noble Lord, Lord Dixon-Smith, referred, made the point that there is no direct correlation between the number of police officers and the level of crime. Your Lordships may join with me in saying that you wish that there were so that to reduce crime we could simply double the number of police officers on the beat. Life is not that simple.
	It is fair to say that that report referred to the matter obliquely, but it should have gone a step further. Much more important than the manpower and the money is the leadership provided at the grassroots. I welcome, as I hope your Lordships do, the fact that this Government have encouraged the establishment of the operational command units, which break down police force areas into small sections, around which the police can walk without running out of breath. They will try to ensure that levels of policing for communities across the length and breadth of England and Wales deliver roughly the same service. As people are aware, at the moment that does not happen. Like the Minister, I know that that does not happen from my experience in another place, when I represented a constituency in Birmingham. Too much was left to the wit and wisdom of the incoming chief inspector or superintendent. Like new brooms, they come in and want to change things.
	I readily confess that my experience of police authorities is totally different from that of other noble Lords. I can remember hearing from the West Midlands police authority only when it wanted more money. I do not knock the authority for that, as that is part of its role, but I was there for 23 years and I never noticed it ensuring that there was a local input to policing, although it may have done so behind my back. I understand the importance of that role, but I believe that it should be improved upon.
	Time and time again it has been said in another place that the Home Secretary of the day carries the can when matters go wrong with the police. The previous Conservative government said that the Home Secretary should not set police force numbers. They said that money should be allocated and that it was up to the chief constables and to the police authorities to work out how that money should be spent. That appears to have changed because Home Secretaries in the present Government have volunteered to decide on the number of police officers. By next year we shall have an extra 5,000 police officers to establish record levels. I leave open the fact that extra officers do not mean less crime and do not mean better detection rates.
	The powers being sought in this part of the Bill are to remedy failure. A Home Secretary cannot get out of bed one morning and say, "I do not like what is going on in the West Midlands or in the Kent Police force or whatever", and pick on them for no reason. There has to be an identified failure in a police force and either an unwillingness or an inability by the local police authority to try to put right that failure.
	If the Home Secretary of the day carries the responsibility when matters go wrong, he or she needs to have powers for circumstances where a failure has been identified and no proper steps have been taken to deal with it. In those circumstances, and against the constraints which a whole raft of amendments to the original proposition proposed, he or she needs to be able to use those powers.
	Today one of the principal partners—the Association of Chief Police Officers—prayed in aid by those who stand behind this amendment, has made clear that it welcomes the amendments that the Minister has tabled to the Bill. A press release issued by the association today says:
	"Chief police officers have welcomed amendments introduced by the Government to the Police Reform Bill . . . We welcome the amendments to the Bill which have been proposed and which go a good way towards limiting the potential for any arbitrary powers of intervention. We particularly welcome the recognition that the leaders of the Service have a key role in giving professional endorsement to any operational codes and regulations".
	If the amendments proposed by the Government to this clause are good enough for the Association of Chief Police Officers, who some weeks ago we were told were in danger of having their masculinity cut from underneath them, and if they now say that they are satisfied, I believe that your Lordships' House should listen to what is being said.
	Those powers have been changed to meet the voices around the Chamber. When we first considered the matter I shared many of the concerns. If we are genuinely on the side of local policing, locally delivered, with everybody as far as possible receiving the same level of policing across the country, we should allow the Home Secretary to have the powers to enable him to do something about an identified failure on behalf of local people.

Earl Russell: My Lords, it is typical of the way in which matters work here that I should begin an attempt to persuade people to vote against the Government by praising the noble Lord, Lord Carter. In the late 1980s the noble Lord, Lord Carter, discovered that there existed model clauses for how to draft a Bill. The phrase by which he detected that was that people were to leave public bodies if they became disabled or otherwise incapacitated to perform their duty. The words "disabled or otherwise" were, of course, quite redundant.
	Here we have a model clause. I have seen it in more Bills dealing with the public services than I care to remember. That began with the Quality Assurance Agency against universities in 1992. It is still possible to persuade any academic to vote in favour of our party by saying that we divided the House against the creation of the Quality Assurance Agency. No further argument is needed.
	We have a model clause designed to deal with failure. By what the Minister will, I am sure, assure me is a coincidence, these model clauses designed to deal with failing forces, failing schools, failing hospitals, always come in at precisely the moment of financial stringency, when one has that sickening realisation that, however hard one tries with the money available, one cannot possibly succeed.
	The suspicion exists in the minds of many public servants that clauses like this are designed to pass the buck. The noble Lord, Lord Corbett, said that the measure was designed to deal with failure. I agree with him. Some of us are born failures; some of us achieve failure; and some of us have failure thrust upon us. Those who suffer this clause will believe that they belong to the third category.

Earl Ferrers: My Lords, I retain a great concern about the clause for many of the reasons given. I agree with the noble Lord, Lord Corbett, that it is to be used in theory only when something goes wrong; and no one ever wants anything to go wrong. But it was Archbishop Fisher who said once that there is no unreasonable argument that cannot be proved reasonable by reason.
	The Government are giving powers to the Home Secretary to intervene over policing matters which have always been the responsibility of local policing authorities. I had occasion to mention earlier the problems we had in 1994 when we introduced a police Bill. The row was over whether one appointed people to the police authority. It was not the Home Secretary taking powers. Subsection (2) of new Section 41A states that the Secretary of State may direct the chief officer of the police. Those are huge powers. Subsection (4) states that the Secretary of State may direct the chief officer of police of the force in question to do various things.
	The Police Service has always run on the tripartite view of the milkmaid's stool with three prongs: the Home Secretary; the chief constable; and the local authority. But for the Home Secretary from Whitehall to direct the actions not of police authorities but of chief constables gives huge power to the centre. With regard to the police Bill in 1994 there was such a row over who should be members of the police authority that I found myself obliged to take back all eight clauses. That was merely a question of who was to sit on the authority. There was no question about whether the Home Secretary should direct people. That would have been intolerable.
	I suggest to noble Lords that this is not the right thing to do. Local police authorities must be responsible for their local policing.

Lord Rooker: My Lords, perhaps noble Lords will forgive me if I repeat much of what I said in the earlier debate on Amendment No. 42. It may be convenient for some noble Lords to treat Clause 5 in isolation but, frankly, they cannot get away with that. I have made a set of proposals, including the new clause, Amendment No. 42, which alters the position. We are not in Committee. It is not the day that the Bill was published.
	Having listened to some noble Lords talking about police authorities, anyone would think that all was right, that the police authorities are doing a fantastic job and that we are simply interfering with their day-to-day activities. No noble Lord pointed out that the clause is activated only if there is failure. It operates only under the procedures set out in the new clause, Amendment No. 42. It is a last resort. No one has talked about that last resort. The last resort is a failure and a breakdown of policing in a local area or force. No one has addressed that issue. They have all said, "We do not like this measure. It is interference".
	Clause 5, as drafted, operated by the procedures under the new clause, Amendment No. 42, operates only where there is a breakdown. No noble Lord from any party asked, "What do we do if there is a breakdown?". Under the procedures in the government amendment, the chief of police and the beloved police authority will have already had one, two, three or four opportunities to put right the failure. What do noble Lords seek today? They seek to let them carry on, to have a fifth chance to fail their communities. That is the reality of removing Clause 5 and ignoring the amendments brought forward by the Government since Committee stage. Noble Lords shake their heads but that is what they seek: a fifth chance of failure, letting down local communities. That is the reality that we face, with noble Lords refusing to accept any alternative but to leave out Clause 5. Without Clause 5 the remaining provisions will go.
	The measure will be activated only after the police authority's own action plan to remedy the publicly acknowledged failure. So there is a publicly acknowledged failure of policing in either an area or a function of a police force. The police authority will then have another opportunity to come forward with its own action plan before Clause 5 is activated. The chief officer will come forward to the police authority with his own extra action plan to deal with that failure before Clause 5 operates.
	What do noble Lords expect? It is failure after failure, with the Home Secretary, not the police authorities, being held accountable before the House of Commons. My noble friend Lord Corbett is right. In his heart, the noble Lord, Lord Fowler, knows he is right. We never noticed a police authority carrying the can as individuals. They are not democratically elected. Someone spoke about the democratically elected. None of us is elected. None of us has to face the electorate having said, "No, we shall settle for failure". That is what it means. Doing nothing means settling for failure. We say that the measure is a last resort, a longstop to a longstop.
	In those circumstances—with narrowly defined areas and following all the reports that we would require—I cannot believe that people with the experience of life that your Lordships have would say, "Let it go. Do not do anything". The noble Lord, Lord Dholakia, referred to the noble Lord, Lord Phillips. I do not want to misquote the noble Lord, Lord Phillips, in any shape or form. I was struck by what the noble Lord said in debate. He was open and honest enough to say in Committee, "Yes, I accept the failure and then it is up to the electorate to do something about it". When Members of another place have the Home Secretary at the Dispatch Box it is not good enough to say, "We cannot wait. We want action in our area now. We have a failure". Nothing would be done behind closed doors. Everyone concerned would know that there was a failure of policing. I do not accept the noble Lord's argument.
	I am told that the Home Secretary can order what local commanders can do only after the failure of the local action plans put forward by the police authority and the chief constable without the Home Secretary interfering. So what do noble Lords want? Is it the status quo? That cannot be acceptable. I challenge any noble Lord to say, "It's all working perfectly". It simply cannot be argued.
	The noble Lord, Lord Elton, said that I camouflaged Clause 5. He did so in the nicest way; I do not take it as personal criticism. Clause 5 on its own in the Bill is not acceptable to the Government, as we discussed in Committee. That is why we have come forward with a package, including Amendment No. 42, setting out how Clause 5 will operate. It would not operate other than under the rules set out in the new clause we want to insert.
	We are not camouflaging Clause 5; we are giving more direction to the tank commander—to use the earlier analogy—who cannot work the tank without operating under the rules set out in the amendment. It is no good noble Lords going through the Division Lobby saying "We didn't like Clause 5". The debate is not about Clause 5. It is about Clause 5 and the rest of the package brought forward by the Government to the House at this stage of the Bill, following four days in Committee. Clause 5 is not on offer on its own, and noble Lords know that. It is on offer with a package of amendments, including Amendment No. 42, which I am moving today on behalf of the Government.
	I cannot answer the detailed questions such as that about the Downing Street crime summit. Perhaps I may put it this way. It did not get going until the Prime Minister spent his time on the matter. Someone had to do something. It was not done under statute; under the force of a piece of legislation such as this; nor under the force of a Minister saying "Go forth and do this, that and the other". With chief constables and others called into Downing Street, that would not be strictly necessary.
	Is that what we are to be forced to do each time there are perceived problems in areas of policing: to have a Downing Street summit behind closed doors without any accountability to this House in the way that we have set out in the clauses and the amendments? Surely it is better to have a more open and transparent process and not to have to leave the matter to Prime Ministerial summits. That is not sensible good governance.
	I feel for the noble Earl, Lord Ferrers, for having to take back eight clauses in 1994. I shall not take back any clauses. The measure will come back from the other place, so this will not be the end of the debate. The other place will know that this debate was not about Clause 5. I refuse to accept that. It is about Clause 5 and the rest of the package specifying how Clause 5 will operate. It is about a last resort; a long stop to the long stop. It is about the Government—I hope with Parliament's support—trying to achieve something where there is openly acknowledged failure of policing in our communities. I beg the House not to throw it out.

Lord Dixon-Smith: My Lords, the Minister has made much of Amendment No. 42. The amendment states:
	"The Secretary of State shall not give a direction . . . in relation to any police force unless—
	(a) the police authority maintaining that force and the chief officer of that force have each been given such information about the Secretary of State's grounds for proposing to give that direction as he considers appropriate for enabling them to make representations or proposals under the following paragraphs...
	(b) that police authority and chief officer have each been given an opportunity of making representations...
	(c) that police authority, in the case of a proposal for the giving of a direction... has had an opportunity of making proposals for the taking of remedial measures...
	(d) that chief officer, in the case of a proposal for the giving of a direction... has had an opportunity of making proposals for the taking of remedial measures...
	(e) the Secretary of State has considered any such representations and any such proposals".
	It does not talk about whether there might be time for those proposals to be implemented or about their failure. The Minister is gently stretching the amendment, although I accept its good intention. We have to deal with the words before us in the Bill. That is a perennial problem with legislation.
	The Minister says—I regret to say, with a certain amount of correctness—that the police authority never carries the can; not least in the persistent failures of local administration which have taken place throughout my experience in local government. That is because of the failure of government in the centre to treat local bodies as if they were responsible, so that they would have had to behave responsibly. They have been wet-nursed, nappied and bailed out so many times that they hardly know that they are adult anymore.
	That is not a criticism of this Government, but this Government are rather better at that than some of their predecessors. I accept the Home Secretary's difficulty when he stands before many irate Members in another place demanding action on a local problem. Something has not been mentioned so far in the debate; the intensification and development of management information over the past decade, largely as a result of computerisation and the speed of communication. These problems have intensified because everything is analysed in so much more detail; detail that did not exist a few years ago.
	We now have a situation where the Home Secretary knows of a problem in Muchbinding-in-the-Marsh or wherever as soon as the local BCU commander does. So does the MP. The MP raises the problem on the Floor of the House. The Home Secretary is naturally embarrassed and feels obliged to promise action without stopping to think about the reality; that local people know there is a problem and they do not need to be told. They do not like the problem any more than anyone else and they will already be taking action to put matters right. That is the answer to the Minister and the noble Lord, Lord Corbett of Castle Vale.
	I am grateful to noble Lords who have contributed to the debate. It has been a useful and important discussion. I return to the fundamental problem I mentioned at the beginning. There is increasing evidence, and reports are coming in increasingly across a number of government services, that the over-centralisation of administration is fundamentally damaging the provision of service to the public. The reason is simple: the perception of what is needed in the centre to remedy action in a place regarded as being a long way away is never the same as the perception in the place itself where they are dealing with the problem on a day-to-day basis.
	Unfortunately that will always be so and we cannot escape it. That is why the clause is unacceptable. I have no hesitation or shame in asking to test the opinion of the House. It is entirely proper.

On Question, Whether the said amendment (No. 41) shall be agreed to?
	Their Lordships divided: Contents, 205; Not-Contents, 131.

Resolved in the affirmative, and amendment agreed to accordingly.
	[Amendments Nos. 42 and 42A not moved.]

Lord Davies of Oldham: My Lords, I beg to move that consideration on Report be adjourned during pleasure. In moving this Motion, perhaps I may suggest that the Report stage begin again not before 8.32 p.m.

Moved accordingly, and, on Question, Motion agreed to.

Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2002

Lord McIntosh of Haringey: rose to move, That the order laid before the House on 14th March be approved [23rd Report from the Joint Committee].

Lord McIntosh of Haringey: My Lords, the primary aim of the order is to give effect to the two European directives on electronic money, which were adopted in September 2000.
	Before going into the detail of the directive, perhaps it would be helpful if I said a word about what electronic money is and what it is not. That will put in context how we have framed the directives and how they translate into UK law. Electronic money, or e-money as it is better known, is best thought of as an electronic substitute for coins and bank notes. It is stored on an electronic device such as a chip card or a computer memory. It is generally intended to make payments of a limited amount.
	At the moment, e-money takes two main forms. First, there are plastic cards onto which e-money can be loaded. These usually take the form of cards with an integrated chip that memorises sums previously paid to the issuer and from which the necessary sums for small purchases are downloaded. Commercial trials of card-based e-money have been undertaken in the United Kingdom by Mondex International in Swindon and VisaCash in Leeds, but they have not yet led to a national scheme. Limited extensions have also been undertaken in self-contained communities such as universities.
	The second main form of e-money is stored in an individual's computer or on a central server. These electronic tokens represent value, which can be used to buy goods and services; for example, over the Internet.
	By contrast, debit cards, for example, are not e-money. Although a debit card allows its holder to make payments, the monetary value is not in any sense stored in an electronic device. The card contains only the data necessary to identify its holder and to link him to his bank account. At present, these data are little more than a bank number. But even when debit cards use chip and pin technology there is still no electronic money held on the card. So credit cards do not constitute e-money as they, by definition, do not represent pre-paid value. Company specific payment cards, such as the traditional BT phone card, are not covered as these are only accepted by the sole issuer.
	To date the success of e-money in the United Kingdom has not been great. Nevertheless, firms are seeking to develop strong consumer propositions for e-money. E-money is best suited to those transactions where physical cash is awkward to use. Examples include use in parking meters and in vending machines that need exact change. Further success may come from multi-application SMART cards which combine an e-purse with other applications, such as a debit or credit card, a transport season ticket or even SMART cards for digital television set top boxes.
	I return to the e-money directives. One of these—2000/28/EC—is largely technical and need not detain us. The meat is in the other directive—2000/46/EC. It introduces a special prudential supervisory regime for issuers of e-money. It creates a special new type of credit institution—an e-money institution—that will be authorised to issue e-money. Traditional credit institutions—notably banks—will also be able to issue e-money. Like banks, authorised e-money institutions will have what are known as passport rights, which will allow them to provide their services throughout the European Union.
	The directive's regime for e-money institutions is based on the existing regulatory regime applicable to banks. In recognition of the more limited need for consumer protection and the fledgling nature of the industry, it is in many respects less complex and thus generally less onerous.
	Set against this, the directive effectively limits e-money institutions only to issuing e-money. Banks, on the other hand, can undertake other activities as well, such as deposit taking. The regime for e-money institutions is also tailored to address some of the specific risks inherent in issuing e-money. For example, strict limits are placed on the investments an e-money institution can make with its outstanding e-money liabilities.
	The Government take a positive and constructive view of the long-term potential of e-money. It provides a chance to create a modern and effective means of payment that will facilitate electronic commerce and novel ways of doing business.
	In implementing the directive into UK law, we have struck a balance between two factors. On the one hand, there is the need to make provision for the financial integrity of e-money institutions and the protection of consumers. On the other, there is the need to ensure that the development of e-money schemes is not hampered by excessive regulation. Our general approach has been to implement the directive with a light touch. In that way regulation will not unduly burden existing e-money issuers. It will also encourage innovation and new entrants, both from within the banking sector and elsewhere.
	The Treasury issued a consultation document last year seeking views on the proposed legislative measures for implementing the e-money directive. That approach received widespread support from industry and consumer groups.
	Perhaps I may turn to some of the technical aspects of the order. The Government have chosen to implement the directive by making the issuing of e-money a regulated activity under the Financial Services and Markets Act 2000. That gives effect to the principal requirements of the directive. First, it ensures that persons not authorised to do so under the Act—other than those with a waiver—will be prohibited from carrying on the business of issuing e-money. Secondly, it enables the Financial Services Authority to impose on e-money issuers the remaining requirements of the directive. The order defines e-money issuance in the same terms as the directive. It means that the FSA will now be responsible for offering firms guidance on the definition. I understand that it will shortly be publishing its guidance.
	With regard to waivers, the directive gives member states the option of permitting their competent authorities to waive the application of some or all of the directive's provisions in relation to certain "small" or "limited" e-money issuers. The Government believe that it is important for new entrants to be able to start up and grow without the burden of unnecessary regulation. We also believe that the risks to consumers posed by such a scheme are likely to be limited.
	We have therefore provided fully for such waivers. They will exempt smaller schemes from the detailed requirements imposed on authorised e-money issuers. That will foster competition and innovation in the e-money industry and encourage its development.
	Larger e-money issuers will, however, be required to seek authorisation from the Financial Services Authority. If successful with its application, these firms will need to meet the prudential and other requirements of the directive.
	In accordance with the deadline set by the directive, the new regime will come into force on 27th April 2002. Firms already issuing e-money on that date will be granted a transitional exclusion. For the first six months after 27th April, they will be treated as not carrying on a regulated activity under the Financial Services and Markets Act 2000. The aim is for existing issuers to use the six-month period to apply for either authorisation or waiver. Meanwhile, issuers will be able to continue their e-money activities without interruption and without needing to comply with any of the requirements of the directive or of the Financial Services Authority's rules.
	The order also makes further, miscellaneous amendments to the regulated activities order. These are of a technical and clarificatory nature. They are made following consultation with the Financial Services Authority and the industry.
	Finally, I confirm, that in my view, the provisions of the order are compatible with the convention rights within the meaning of the Human Rights Act 1998. I commend the order to the House.

Moved, That the order laid before the House on 14th March be approved. [23rd Report from the Joint Committee].—(Lord McIntosh of Haringey.)

Lord Lipsey: rose to move, as an amendment to the Motion, at end insert "but this House regrets that Her Majesty's Government have postponed fulfilling their pledge to the House to introduce a similar order for the regulation of long-term care assurance."

Lord Lipsey: My Lords, before I come to the substance of the matter, perhaps I may make three points. First, I have absolutely nothing against the order, I wish only that another order had come first. Secondly, the noble Lord, Lord Joffe, asked me to apologise for the fact that he is unable to be here tonight. He, having with myself signed the minority report of the Royal Commission on Long-Term Care of the Elderly, would have liked to be here to support the amendment. Thirdly, what I shall say will be critical of the Government, but I wish to say that no blame attaches to my noble friend Lord McIntosh, nor to the Treasury Ministers who have dealt with the matter.
	I remind the House of the background. It was the recommendation of both the majority and minority reports of the Royal Commission that long-term care insurance should come under the regulation of the Financial Services Authority—one of the few things on which we agreed. That was strongly supported by consumer groups and the entire industry, which wants to be regulated in the sale of such products. It was resisted by only one group: Her Majesty's Treasury. I shall not go over its reasons now. When the Financial Services and Markets Act 2000 was before the House, amendments were tabled to ensure that it should be regulated. In their wisdom, the Government recognised that it would be futile to attempt to resist the amendments, as they had support in every quarter of your Lordships' House. They therefore gracefully stepped down. That was done by my noble friend, in his usual elegant and graceful language. He said:
	"We shall aim to include long-term care products in the regulated activities order, often referred to as the scope order, which will follow the passage of this Bill . . . I undertake that we will give the House a full report of our conclusions, with a clear timetable for future action, at the time when the order is debated. The Government intend to lay that order before Parliament as soon as is reasonably practicable. We are determined . . . that the stable door will not be left open for so long that there is a serious risk that the horse will bolt".—[Official Report, 18/4/2000; col. 581.]
	In February 2001, nine months later, the regulated activities order appeared in this House. It did not mention long-term care insurance. I did not worry too much. After all, I had the word of my noble friend. On 16th March, my noble friend moved the order. Again, there was no mention of the promised timetable or of doing anything to implement it. I should have picked that up at the time, of course, but I did not worry, because I had the word of my noble friend. The months ticked by.
	It was December 2000, eight months after the Bill, when the House had said that it wanted long-term care insurance covered, that the Treasury finally acted. It produced a consultation document, which was a little weak but better than nothing. It said that Ministers favoured regulation. It invited comment by March 2001, which we awaited.
	Nothing happened, but I had the word of my noble friend that all was being done as soon as possible, so I did not worry too much. Again, months ticked by, and then—Eureka!—a letter arrived from Ruth Kelly, the Economic Secretary to the Treasury, dated 5th October, in which she said that she would shortly be announcing that long-term care insurance was to be regulated by the FSA and that she hoped that regulation could be put in place as soon as possible.
	I had waited a long time for that day—Eureka day. The champagne was opened. I can remember the moment at which I took my fat file of correspondence on the matter, opened the wastepaper basket and threw it in. How nai ve. Again, months ticked by. In February, I received a letter from the Economic Secretary dated 31st January. Europe, it told me, had decided to move to a wider regulation of all insurance using intermediaries. It had therefore been decided that it would be right to delay providing for long-term care assurance until then—by 2004, the letter said, on present timing.
	Given my experience of present timing over the matter, those words did not give me tremendous comfort. It may be that I shall be surprised by the measure in 2004, but I see the noble Lord, Lord Oakeshott, who is a gambling man, sitting opposite. Would he care to take even money on 2004—the noble Lord shakes his head—2005, 2006, what is the favourite in this market? Sometime? Never? Who knows?
	That farce of dilatoriness and delay has important constitutional implications for how we do business in this House. We do business on the basis that when a Minister gives an assurance it will be seen through and delivered. Otherwise, many more amendments would be put to the vote and forced to decision from which there could be no reneging. I say in all seriousness and trying to avoid an excess of pomposity that if that convention goes, the way that we do business in this House and in another place will start to collapse. Heaven knows, it is hard enough ever to persuade the executive to accept the view of Parliament, but on occasion this Parliament presses its view. It is then incumbent on the executive to take that with utmost seriousness—not to try to delay, to destroy or to use "Yes, Minister" tactics to prevent the House getting its way but to bow the knee before the will of Parliament.
	That is the high constitutional argument, but another argument weighs heavily with me. It concerns old people themselves. We did not press the amendment for the sheer pleasure of doing so. It was not some game that we were playing. The House felt that old people were in peril as a consequence of the lack of regulation of long-term care insurance. Since then, more than 2,000 policies have been sold. Those people lack the protection that regulation would have given them.
	But it is more than that. The industry says—and I have no reason to disbelieve it—that it will not sell many such policies until they are regulated because old people will not have confidence in them. That is why the take-up has been quite small. So thousands more older people may lose all their assets, which they could have protected by taking out a long-term care insurance policy, as a result of the Government's culpable failure to put in place regulation.
	It is a sorry tale. What is the way forward? The first way forward would be for the Government to ignore the decisions and views of the House again, as they did last time, and proceed as they wish. One day, perhaps, we would see regulation, or perhaps we would not. That would not be acceptable to the House. Unless the Government give us the right assurances, we will find that future debates are more crowded and that there is much more press coverage. The conventions governing our business will be insisted on by the House. That is my view. The Government can try to prove me wrong if they choose.
	The second way forward—my clear preference—would be to proceed at once to bring in the order. The Government must have it ready by now. My goodness, it has been cooking away for more than two years. We could have limited consultation—the Financial Services Authority could do that if it were not tangled up in all the other regulation—and put the regulations in place as soon as possible. We should get on with it and get it done. That is my strong preference. However, there might be a fall-back. There are certain protections in place—for example, the code of the ABI for the products involved. There is, however, no protection against the wildcat independent financial adviser who sells the products to people who might not need them.
	It would be worth while if those of us who have followed the subject and who have pressed it and the Government could explore interim protections—less good, I admit straightaway, than full regulation, but better than nothing—that would enable the House, in its infinite forgiveness, to forget what has been done. I hope, therefore, that my noble friend will say tonight that the Government are willing to open discussions and explore the options and that they will do their best, thinking creatively and positively, not entering the discussions with a view to blocking the proposals, about what must be done. I hope that my noble friend can agree to that. I have great trust in him, despite the things that have gone wrong. I shall be delighted to accept such an invitation, secure in the knowledge that I—and the House—have my noble friend's word. I beg to move.
	Moved, as an amendment to the Motion, at end to insert "but this House regrets that Her Majesty's Government have postponed fulfilling their pledge to the House to introduce a similar order for the regulation of long-term care assurance."—(Lord Lipsey.)

Baroness Greengross: My Lords, I support the amendment moved by the noble Lord, Lord Lipsey. In spite of the medical advances and the advances in social care and healthcare that have been made, we know that our society is ageing fast. In the foreseeable future, there will be many more people suffering from chronic disease who will need long-term care. From my experience of the organisations that represent old people, I can say that people are getting more and more anxious. They are anxious to ensure that they can retain some dignity in later life and can ensure for themselves that they get the care they need.
	Long-term care insurance is usually purchased by older people, although it can, of course, be purchased by people of any age. Most people do not think about it until they are of advancing years. Therefore, the people who purchase long-term care insurance policies are sometimes vulnerable when they do so, as their need is imminent. It is essential that the industry be regulated. We have had enough examples of the consequences of having no regulation or poor regulation and of the mis-selling of financial products. Home income plans are one example of a good idea to which extraordinary damage was done by just such a lack of regulation. Long-term care insurance, as we all know, is not suitable for everyone, but it has an important role to play in its own right and in appropriate cases. However, selling such insurance to the wrong person is, itself, a form of mis-selling and can do great damage to the whole market, if it happens in that way.
	It is necessary that regulation be introduced. It must be introduced quickly. As the noble Lord, Lord Lipsey, said, there have been huge delays. When we are dealing with older people, such huge delays are unacceptable. Older people cannot wait indefinitely. Why should they have to?

Baroness Dean of Thornton-le-Fylde: My Lords, I also support the amendment moved by my noble friend Lord Lipsey. When the original amendment to the Bill was before the House, I spoke in the debate and, like my noble friend, I believed that the Treasury genuinely intended to do something about the matter. It is not as though we were discussing people with their life ahead of them. It is now nearly two years on—longer if we take into account the recommendations from the commission of which my noble friend was a member. We are talking about some of the most vulnerable members of our community.
	The intermediaries directive was referred to. I gather that the Treasury Minister said that it would cover the matter and talked about a date in 2004. That depends on directives being delivered on time from Europe. There is no guarantee of that.
	I should declare that I am a member of the General Insurance Standards Council. That is not why I intervened this evening. Nor was it the reason for my intervention in the debate on the original amendment. I intervened then—as I do now—because I see the life-damaging impact that the pensions scandal has had on elderly people. Many thousands of people in Britain are worried about their pension. They are worried about final salary schemes that are in huge deficit and the move to money purchase schemes, many of which are themselves worth less than they were when they were bought.
	If there is one crumb of comfort that we could give to older people, it would be this regulation. There is no reason why we could not have the regulation. If it is necessary to subsume it into future regulations from 2004, because of the intermediaries directive, that could be done then. It is wrong to expect people to wait for fair regulation of a major investment that has great impact on their life until 2004 at the earliest. That is why I support the amendment.

Lord Blackwell: My Lords, I add my support for the amendment moved by the noble Lord, Lord Lipsey. As long ago as 1996 or 1997, there was a Green Paper on long-term care. It made various proposals but, for several reasons—one of which was a change of government—none of them went forward. Since then, little has happened to develop the market, even though, as the noble Lord, Lord Lipsey, said, it is a critical issue that we must get right. There is a huge need to cover the cost of long-term care, but the matter is in a vacuum. It is important that we move forward with regulation.
	I have a question for the Minister. How will the order relate to electronic money that might be stored on mobile phones? If there is an electronic wallet on a mobile phone, linking into the Internet, that would be regarded under the order as electronic money. I am less clear on the situation in respect of payments in advance that are registered on mobile phones. Such pre-payments may be primarily for the purposes of pre-paying calls, but they could also be used to pay for other services. For example, if the mobile phone holder calls a premium call number, he may be using the money stored on the phone to pay for services through the premium number or to pay for services registered back to the phone through text message ordering. It is a simple point of information. I am not clear as to how pre-payment vouchers and pre-payments stored on a phone would relate to the order.

Lord Newby: My Lords, I have considerable sympathy for the arguments put forward by the noble Lord, Lord Lipsey. When his original amendment came before the House, we supported it. We had expected that it would have been acted upon by now. We look forward to hearing the Minister give some reassurance that action will be taken. The noble Lord, Lord Lipsey, spoke of the possibility of introducing what I think he called "interim protections". I shall be interested to know what such measures might be. I suspect that something either is or is not formally covered by the FSA, but if there is such a thing as an interim protection, it is hoped that it could be brought forward quickly.
	The only comment I wish to make with regard to the remit of the FSA in respect of any insurance products is that, at the time that the Bill was passing through this House, we were keen to ensure that the FSA would cover not only the specific area of insurance for the long-term care of the elderly, but the insurance industry more generally. At the time we were persuaded by the Minister and the Treasury that we should not press those amendments, on the basis that such a proposal would greatly increase the scope of the work of the FSA. In its first years the body would have enough on its plate simply to fulfil what was required of it under the terms of the Bill. It could not also take on insurance matters.
	Having watched the FSA take on its new powers, I suspect that the staff are extremely grateful that, at least last year, they did not have to worry about insurance matters. However, I think that the time has now come for the whole area to be looked at again.
	I turn now to the main order. It seems sensible, although in terms of order of priority, electronic money does not strike me as a hugely important area in comparison with that raised by the noble Lord, Lord Lipsey. Furthermore, it will form one of a series of amendment orders because I believe that there are a number of other areas in which the remit of the FSA is not as wide as it needs to be.
	Noble Lords who participated in the debate some weeks ago on the accountancy industry will have heard me speak about the position of the split investment trust sector, in which many savers, principally pensioners, have invested substantial amounts of money in products that were sold to them as low-risk investments, but which have since proved to be extremely high-risk investments. In many cases, people have lost a large proportion, if not all, of their savings. I understand that as many as 30,000 people stand to lose in this way. It is a major problem.
	A further problem that the matter has brought to light is that those people who invested in splits, other than through independent financial advisers, are not covered by the FSA. They may have lost all their money, but they are not covered by the compensation scheme and they are not covered by the financial services ombudsman. I believe that this may well be another case where the regulatory scope needs to be examined.
	At the moment the FSA is undertaking a review of the entire splits sector. I believe that that review will demonstrate that there has been mis-selling of such products. Logic dictates that they should now be regulated under the Financial Services and Markets Act 2000. I should be grateful if the Minister could confirm that such products could be brought under the control of the FSA by means of an amendment order along the lines of that which we are discussing tonight.

Lord Kingsland: My Lords, we are most sympathetic to the substance of the amendment tabled by the noble Lord, Lord Lipsey. We also have a few technical concerns with regard to the order, of which I understand the Minister is already aware.
	Article 3 states that proposed Article 9A provides that cash paid to buy electronic money is not a deposit for the purposes of the regulated activities order if the cash is immediately exchanged for electronic money. Can the Minister tell the House whether this covers a situation in which cash is paid in when applying for an electronic device?
	Article 4 makes it clear that the issuing of electronic money is a regulated activity requiring a FISMA authorisation certificate, unless the requirement is waived. Waiver is dealt with by proposed Article 9C, upon which I have certain observations.
	First, why, by virtue of Article 9C(2), can the activities of credit institutions never be waived?
	Secondly, there appears to be an inconsistency between paragraph 10.2 of the Explanatory Memorandum and Article 9C(5)(c)(ii). According to the Explanatory Memorandum, the FSA can issue a waiver certificate to an issuer of e-money if it is accepted by the issuer's parent, subsidiaries of the issuer which perform functions ancillary to the issuing of electronic money or subsidiaries of the parent. However, we observe that paragraph (5)(c)(ii) excludes all subsidiaries of the issuer.
	Thirdly, in our view, paragraph (6)(b) of Article 9C should be amended to make it clear that the waiver applies where some of the "one hundred persons" fall in paragraph (6)(b)(i) and the remainder in paragraph (6)(b)(ii) so as to be consistent with paragraph 10.3 of the Explanatory Memorandum.
	I have a few concluding observations. First, under Article 9E, we think that the deeming provision in paragraph (3) ought to apply to the Part IV permission as well.
	Secondly, contrary to the view expressed in paragraph 13 of the Explanatory Memorandum, we think that the compensation scheme ought to be extended to small issuers, at least if they are exempted under paragraph (4).
	Thirdly, Article 9(4)(b) of the order suggests that the regime applies where e-money is issued from outside the UK to a recipient inside the UK. If that is so, it would be helpful to provide an exemption under Article 72 of the regulated activities order, which is the article dealing with exemptions of overseas persons generally.
	Finally—the Minister will be relieved to hear—paragraph 20 of the Explanatory Memorandum states that the proposal under Article 12 seeks to ensure that a,
	"security repayable on notice of less than one year should be treated as commercial paper",
	and therefore as a deposit. However, the implementing new Article 9(3) refers only to an investment which has an original maturity of less than one year, and not to a notice period. Thus, a security terminable on one month's notice does not necessarily have a maturity of less than one year as at the date of issue. This problem could be solved by inserting after the expression, "date of issue", the phrase, "or can be redeemed at any time on less than 12 months' notice without any default by the issuer".

Lord McIntosh of Haringey: My Lords, I have three speeches to make: one about long-term care insurance; one about split capital investment trusts and one about the order before the House. I am not sure in which order to make them. If the House will allow me, I shall deal first with the original order and then finish by dealing with the amendment, because that is the question which will be put immediately to the House.
	I am grateful to my noble friend Lord Lipsey and the noble Lord, Lord Newby, for saying that they do not object to the order. Perhaps I may deal with the points raised by the noble Lords, Lord Blackwell and Lord Kingsland.
	The noble Lord, Lord Blackwell, asked me about pre-paid mobile phones and premium services orders. Pre-paid mobile phones which do not involve premium services would not count as e-money because the money goes back to the issuer. They are no different from existing BT phone cards. The question is whether pre-paid mobile phones can be accepted as a means of payment by persons other than the issuer. It is critical to determine whether that is the case when interpreting the definition of e-money. The case raised by the noble Lord concerns premium rate services, where third parties are paid for the services provided—although of course they are paid by the mobile phone operator rather than directly by the customer using the services. We do not yet have an answer. The FSA is considering whether such pre-paid services constitute e-money and it hopes to give its formal view shortly.
	I turn now to the first point raised by the noble Lord, Lord Kingsland, which concerns the distinction between e-money and deposits in paragraph (3) and the provision that cash paid to buy electronic money, which could be used to pay for goods and services and to repay the cash by doing so,
	"is not a deposit for the purposes of article 5 if it is immediately exchanged for electronic money".
	The directive states that sums received in exchange for e-money do not constitute deposits if they are,
	"immediately exchanged for e-money".
	Respondents to consultation welcomed our proposal to use this wording in the implementing legislation on the grounds that it provides a clear distinction between e-money and deposit taking.
	But scenarios can be envisaged where there is a time period between when a consumer purchases the e-money and when he activates his e-money account or card. We believe that "immediate" does not mean "instantaneous" and that certain such delays in issuance can be justified on operational grounds. Much will depend on the length of the delay and the reason for it, and the FSA will be responsible for interpreting this element of the directive. I understand that it agrees with our analysis.
	The noble Lord's next question concerned why a waiver is not available for traditional credit institutions. It is correct that Article 9C(2) states that traditional credit institutions cannot benefit from a waiver. This is a requirement of the directive.
	The noble Lord asked about the waiver for e-money accepted only by undertakings in the same group. This concerns the conditions under which the FSA can grant an exemption by means of a waiver to a qualifying e-money institution—which I am afraid we are going to have to learn to call an "ELMI"—if the e-money is accepted as payment only by the parent undertaking, subsidiaries of the ELMI which perform ancillary functions and other subsidiaries of the parent.
	This again is a matter of the directive, which stipulates one waiver condition as being that,
	"the e-money issued by the institution is accepted as a means of payment only by any subsidiaries of the institution which perform operational or other ancillary functions relating to e-money issued or distributed by the institution, any parent undertaking of the institution or any other subsidiaries of that parent undertaking".
	We believe that the drafting of the order achieves this.
	The noble Lord then asked about conditions for the waiver of geographical and close relationships, and asked whether both of the conditions with regard to permitted locations and close relationships must apply to all of the 100 persons or whether they can be combined. This relates to Article 9C(6)(b). The waiver condition is met only where all the undertakings accepting the e-money fall under either sub-paragraph (i) or (ii). It is not possible for some of them to fall under one sub-paragraph and some under the other. All the undertakings concerned must operate in a limited local area or as part of a close business relationship with the issuer for a waiver to be available.
	As to the question about drafting for applications process work under Article 9E—the noble Lord, Lord Kingsland, raised the issue of the deeming provisions—we believe that the order achieves the desired application of the warning and decision notice procedures contained in the Financial Services and Markets Act. The order provides that the relevant provisions of the Act,
	"apply to the revocation of a certificate . . . As they apply to the cancellation of a Part IV permission".
	The further words suggested by the noble Lord are therefore not necessary.
	Turning to the issue of a compensation scheme for small issuers, the Government believe that it is important to allow e-money to develop under as light a regulatory touch as possible while taking into account the need for prudential regulation of large-scale issuers. Such issuers may not exist at present, but they will in the future as e-money develops. Not only are current e-money schemes fairly small but also the amount of e-money that consumers are likely to hold is limited. The directive noted that e-money is largely used for lower value payments, so the losses that a consumer may suffer in the event of an e-money issuer's failure are correspondingly likely to be fairly low.
	As to the overseas persons exemption, the noble Lord asked whether I could clarify that Article 9(4)(b) of the order, which refers to issuants on a services basis, also applies where the e-money is issued from outside the United Kingdom to a recipient in the United Kingdom. He queried whether it would not be appropriate to provide an exemption in terms of Article 72 of the original regulated activities order. Article 9(4)(b) must be read in the context of the rest of the Financial Services and Markets Act—and neither he nor I wish to do that. In particular, Section 19 of the Act makes it clear that the carrying on of a regulated activity requires authorisation only if it is carried on in the United Kingdom. So where an overseas person issues e-money in the United Kingdom, whether by way of a branch or otherwise, he will require authorisation. We have not applied the exclusion for overseas persons in Article 72 of the order to the activity of issuing e-money. The directive requires us to prohibit persons who are not credit institutions from carrying on the business of issuing e-money. It is therefore not open to us to apply the existing exclusion for overseas persons to e-money.
	The noble Lord's final point concerned debt securities, and he quoted paragraph 20 and the amendment to Article 12. The intention is that if a debt security is repayable on notice of less than a year, including repayment on demand, it is treated as commercial paper and it is a deposit. The current definition provides that the investment,
	"must be redeemed before the first anniversary of the date of issue".
	This is too rigid as it excludes debt securities which are capable of running on for more than one year, even where they are repayable on notice of less than a year or on demand. We are satisfied that the drafting catches this kind of investment.
	That is speech number one. Speech number two relates to split capital trusts. We appreciate the work being carried out by the noble Lord, Lord Newby, and the attention that he has drawn to the problem of split capital investment trusts. It is a problem and he is right to draw attention to it in public. We share his concerns about the problems which appear to be arising with some—but by no means all—split capital investment trusts.
	The FSA has put useful information for investors in split capital investment trusts on its website and will shortly be releasing the responses to the issues paper it published earlier this year. This will help to decide whether there are allegations of mis-selling and collusive behaviour which need to be investigated further. Ministers will then be in a position to consider whether the regulation of investment trusts is appropriate or whether further regulation would be appropriate.
	It would be a mistake to think that there is nothing the FSA can do with its existing powers. Where split capital investment trusts are held in an ISA or unit trust, or where a firm gave advice, then FSA rules apply. Where a firm gave advice on whether or not to buy a split capital trust, FSA rules on suitability apply. FSA advertising rules will also apply to sales brochures and publicity material. FSA powers to deal with market abuse mean that the FSA can censure or fine anyone, authorised or not, who, for example, creates false or misleading impressions about a financial product. In addition, most investment trusts are companies listed on the London Stock Exchange and the listing rules apply to them. These govern how shares are offered for sale. In addition to these FSA powers, there may also be a case for action to be taken under company law. I should add that it would be wrong to assume that investment trust companies have fallen foul of these rules before the FSA has properly investigated.
	There is still a problem about investors who bought direct from the provider. Where an investor bought a split capital investment trust on an execution only basis—that is, direct from the provider, without advice—and feels that the promotional literature misled him or her as to the nature of the product, he or she should complain direct to the company in the first instance and, if they are not happy, should go to the financial ombudsman.
	It is necessary to say how we would regulate investment trusts. As I have said, some of the aspects of the operation are already investigated. If further regulation is required, it would depend on how we proposed to regulate them. The regulated activities order would need to be amended. I can confirm specifically that the noble Lord is right in thinking that there will be more regulated activities amendment orders in the future and this could be one of them.
	If the decision was to regulate the products in the same way as unit trusts or open-ended investment companies—having mentioned ELMIs, I am reminded of OEICs. Separate legislation would be required setting out the product regulation. Beyond this, the FSA would need to consult on any proposed regulation and be sure that it was supported by cost-benefit analysis. I hope that that covers the range of points made by the noble Lord, Lord Newby.
	I turn now to the matter raised in the amendment moved by the noble Lord, Lord Lipsey. I should respond first to the noble Lord's comment about what was said during the passage of the Bill. I indicated that the Government would aim to include long-term care insurance in the regulated activities order. I also outlined the various processes which the Government still needed to go through before determining what measures should be taken to ensure that consumers in this area are fully protected. These include completion of the work of the Treasury committee, completion of the process of regulatory impact analysis, and the necessary consultation with interested parties.
	As the noble Lord said, I undertook in this House in April 2000 that the Government would give the House a full report of our conclusions on the matter, with a clear timetable for action when the regulated activities order was debated in the House. That debate took place on 16th March 2001, and I did not do that. I formally apologise to the House for that failure. I did not explain why we had not included the regulation of long-term care. I did not provide a timetable for future action. However, I should like now to give a full explanation of why that was missing, and outline our timetable for the regulation of long-term care insurance. I ought to begin with a firm assurance that we do intend to regulate long-term care insurance.
	The conclusions of the Treasury committee were published as part of the Treasury's consultation document on long-term care insurance regulation in December 2000. The noble Lord, Lord Lipsey, did indeed receive his copy and responded to the consultation. The purpose of the committee was not to examine whether or how long-term care insurance should be subject to regulation, but to explore with the financial services industry ways in which long-term care insurance products could be made more attractive to a wider audience. The main recommendation was that the Treasury should promulgate a set of CAT standards which operate on a voluntary basis.
	However, when following the public consultation the Government decided to bring in statutory regulation, they decided against additionally setting CAT standards for LTCI products. Such detriment as might arise in future would be addressed through statutory regulation. CAT standards are useful for those products that consumers can choose off the shelf; but LTCI is not bought that way. It is bought alongside other products and with help from advisers. So we believe that the best way forward is to let the market develop and innovate in a regulated environment.
	We published the first consultation document in December 2000, and consultation closed at the end of March 2001, which was too late for legislation to be included in the original regulated activities order made in March 2001. But with the subsequent decision to regulate the sale of general insurance products more generally, announced at the end of December 2001, the Economic Secretary decided to dovetail regulation of long-term care insurance with implementation of the wider general insurance regime. I understand that she wrote to the noble Lord, Lord Lipsey, to explain the decision in January 2002.
	The Government are fully committed to legislate to regulate long-term care insurance. There are, however, good reasons why we have not yet legislated to regulate it. We intend to dovetail the regulation of long-term care with the implementation of the European Community insurance mediation directive. I shall respond to the point made by the noble Baroness, Lady Dean, about the timetable.
	The regulation of both mediation of long-term care insurance and mediation of other forms of insurance—because, of course, contracts are already regulated; it is the question of mediation and advice with which we are concerned here, the conduct of business regulation—will need to be compatible with the EU insurance mediation directive which we expect to be adopted in the summer.
	Doing things in parallel brings with it the advantage that we can create a seamless regime for the regulation of long-term care insurance and other related insurance products—for example, private medical and critical illness insurance. One of the difficulties in attempting to do it separately is the difficulty of defining a contract of long-term care insurance. Many of the products on the market are a mixture of life insurance, critical illness insurance and provision for long-term care. The FSA Consumer Panel's response to the long-term care insurance consultation was that there were problems with all these products that could be addressed by regulation. There is a risk that pressing ahead with long-term care now and fitting the general regime around it could produce an overall structure that distorts the market and might cause anomalies for the consumer who buys these and closely related products. We cannot anticipate such potential problems in advance. The only way to avoid them is to take the regime forward at the same time. That is my basic response to the first way referred to by the noble Lord, Lord Lipsey.
	My response to his second way is that, even if we did go ahead and regulate long-term care insurance as soon as we could, there is still a need to prepare difficult and technical legislation, to undertake public consultation and to put orders through Parliament. The FSA would need to consult on its rules, and then give time for the industry to gear itself for the detailed regulatory regime. That process could take more than a year; therefore, we should be talking about autumn 2003 anyway. The burdens on industry would be increased, because it would have to respond to two streams of consultation as well as needing to seek permission from the FSA twice. Even though I acknowledge that many firms are keen to see regulation brought in quickly, they would not welcome two rounds of compliance costs in quick succession. Therefore, we argue that regulating separately from insurance mediation would be inefficient, requiring two public consultations, two sets of legislation, and two sets of FSA consultation and FSA rules.
	Regulating long-term care insurance in advance of other forms of mediation will also give rise to substantive difficulties. Any regime for long-term care insurance will, from mid-2004, have to comply with the new general insurance regime which will implement the insurance mediation directive. This is a technical directive which has yet to be finalised and adopted. We could not be certain that a regime that we put in place quickly would be directive compatible. If we did so, we would have to amend the LTCI regime when we implemented the insurance mediation directive. That would cause difficulty for the industry and could confuse consumers.
	There will also be real advantages for consumers in developing the overall regime in a way that takes account of the work that we have already done on long-term care, but firms up the detail of that regime alongside related products. In that way, we can develop a smoother regime that offers consumers protection across the board in a way that is proportionate to the risks inherent in the products.
	The noble Lord, Lord Lipsey, and the noble Baroness, Lady Dean, asked about the timetable. The Government plan to legislate later this year, once the insurance mediation directive has been adopted and the new general insurance regime can be finalised. The Council of Ministers reached a common position on the insurance mediation directive on 5th March 2002. The European Parliament is starting the process of its Second Reading, which it must complete by mid-July. We expect the directive to be adopted by the Council shortly after that. It is possible that it could be changed or rejected by the European Parliament, but we do not think that is likely and we are working on the assumption that the directive will be adopted in July or soon after. Once it is in its final form and has been adopted, we shall consult on the implementing legislation. We are preparing now so that we can issue consultation as soon as possible, within a few weeks of the directive being adopted. Following that, we shall put the legislation before Parliament.
	Once we have legislated, the FSA will prepare and consult on its rules. Once the rules have been finalised, we expect firms to be able to apply for authorisation. We expect the regime to become fully operational by mid-2004. That is to give the FSA time to develop its rule books and register many thousands of insurance intermediaries, who will be brought within the scope of regulation. The General Insurance Standards Council has more than 6,000 members and 1,000 applicants, all of whom will need to be registered. The regime will also cover certain insurance intermediaries not covered by GISC. Bearing in mind that we shall also be regulating mortgage lenders for the first time, it will be seen that this is an enormous extension in the scope of responsibilities of the FSA.
	The noble Lord, Lord Lipsey, made a third point about the need to protect consumers in the run-up to regulation. Ministers and officials will certainly discuss with the FSA and the industry ways of maximising the current protections for consumers in the run-up to regulation. We shall be happy to involve him and any other noble Lords who have taken part in the debate in the consultation. Insurers who effect and carry out contracts of insurance, including the contracts of long-term care, are regulated by the Financial Services Authority. They have to comply with FSA rules on areas such as capital requirements, fitness and properness. The insurance mediation activities—advising on and arranging contracts of insurance—need to be brought under FSMA regulation. Some protections are already in place because of the compulsory jurisdiction of the Financial Ombudsman Service, which ensures that consumers have access to an independent and free service that provides redress. The ABI has its own code of best practice. The General Insurance Standards Council has a code of conduct. If an insurer is a member of the General Insurance Standards Council, its rules require that it ensures that intermediaries who distribute its products who are not in GISC membership understand that they have to comply with the various ABI codes.
	IFACare is a national organisation of independent financial advisers with a special interest in providing financial planning services to those concerned with current or future need for long-term care. IFACare has more than 250 IFA members, all of whom are regulated by the FSA—not in respect of selling long-term care insurance, but they have to meet FSA fitness and propriety and other requirements.
	Ministers and officials will be talking to the industry about the existing protections, options for strengthening them, and marketing them more effectively in the run-up to full regulation to give customers a better service and better reassurance. We are happy to include other noble Lords in that process.
	Once again, I apologise to the House for not describing sooner the outcome of the work on long-term care insurance and the timetable of its regulation. I am pleased to have had the opportunity to rectify that and to set the matter straight on our future plans. I am convinced that implementing long-term care insurance as part of the wider general insurance regime under the scope of the insurance mediation directive will benefit consumers by introducing a seamless and comprehensive regulatory regime covering long-term care insurance and other related insurance products.

Lord Lipsey: My Lords, I thank all those who have spoken in support of my amendment this evening. It will not have escaped the Minister's attention that they came from all four quarters of your Lordships' House. I noticed the reference by my noble friend Lord McIntosh to the further orders that will come before the House. We shall have many more opportunities to debate amendments on the subject, should that prove necessary.
	I noted carefully the arguments that my noble friend the Minister made. Of course I accept in full his apology for the omission when the relevant legislation was debated. I am sure that it was an oversight and no culpability should fall on him. It is my fault for not being here to ask him about it at the time.
	I am not convinced by my noble friend's argument that we should wait for the rest of the package to come along. The matter should have been dealt with ages ago. We would then have had to make some changes to accommodate the European directive at that stage. It is not enough to wait and wait until an excuse comes along for further postponement. I agree that there are some practical defects in doing it in that way. That is why we should explore ways in which adequate protection can be given.
	I very much welcome the Minister's assurance that he and the Treasury team will discuss the matter with the industry and with interested Members in this House. I hope that we can find a way forward. I assure him and the House, as he would expect, that if such a way forward is not found, we shall continue to press these matters, not simply because of their constitutional impact, but because of the argument so powerfully put by the noble Baroness, Lady Greengross, and my noble friend Lady Dean that old people cannot afford to wait for these protections, because otherwise the protection may not be there after they have gone. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	On Question, Motion agreed to.

Police Reform Bill [HL]

Consideration of amendments on Report resumed.
	Clause 6 [Regulation of equipment]:

Lord Rooker: moved Amendment No. 43:
	Page 6, line 4, leave out "such" and insert "with—
	(a) persons whom he considers to represent the interests of police authorities;
	(b) persons whom he considers to represent the interests of chief officers of police; and
	(c) such other"

Lord Rooker: My Lords, I can be brief. Clause 6 and its equivalent for the National Crime Squad relate to the regulation of equipment. Under the original wording, the Home Secretary would be required to consult,
	"such persons as he thinks fit"
	before making regulations under the provisions. In response to concerns expressed in Committee, Amendment No. 43 would make it crystal clear that he was required to consult representatives of police authorities and chief officers of police before regulating equipment. Amendment No. 95 makes the equivalent change to paragraph 5 of Schedule 1. I beg to move.

Lord Dixon-Smith: My Lords, I welcome the amendment. Although it is in keeping with others, it is no less welcome for that. I think that the Government are doing a great deal to try to move the Bill along the lines that are being suggested.

Lord Dholakia: My Lords, I endorse what has just been said by the noble Lord, Lord Dixon-Smith. We certainly welcome the amendment.

On Question, amendment agreed to.
	Clause 7 [Regulation of operational procedures and practices]:

Lord Bassam of Brighton: moved Amendment No. 44:
	Page 6, line 18, leave out "operational"

Lord Bassam of Brighton: My Lords, many noble Lords expressed concerns about this clause in Committee. Before I explain the intention of these amendments, I should just re-iterate what our intention is in this clause.
	Where it would be in the national interest for all police forces to adopt common procedures or practices—but only then—the Home Secretary would lay a regulation before Parliament. By that, we mean where forces need to be able to work closely with one another—where they need to share resources or be able to work in the same way, or where they need to be able, effectively and efficiently, to share information. We have offered the example of the national intelligence model as a means of ensuring that all forces are gathering and handling intelligence material in the same way.
	Sadly, criminals do not operate within force boundaries; it would be much easier for us if they did. Forces therefore need to be able quickly and effectively to share robust information on criminals, their modus operandi and their whereabouts. A number of other examples powerfully make the case for this regulation-making power. There may be occasions when adjacent forces need to respond to the same terrorist or firearms incident; an armed robbery, for example, may give rise to a pursuit across force boundaries. It is essential in such circumstances that the officers responding to incidents have received similar training and are deploying similar tactics. There could be a very real risk to the safety of the officers and to members of the public if different approaches to such situations gave rise to any confusion.
	We think that there is a strong need for this provision. That need has been acknowledged by the Association of Chief Police Officers, which has long argued for more effective machinery to ensure that good practices are adopted across all forces. The association's original concern was that the Bill as drafted did not give sufficient weight to its position as the professional leader of the service. The government amendments, the detail of which I shall come to, have addressed that concern. In a press release issued today, the association stated,
	"We welcome the amendments to the Bill which have been proposed ... We particularly welcome the recognition that the leaders of the Service have a key role in giving professional endorsement to any operational codes and regulations".
	Noble Lords made it quite clear in Committee that this power as currently drafted had the potential to be too far-reaching. We acknowledge that Clause 7 as introduced went rather wider in its effect than we had intended. Accordingly, these amendments seek to narrow the ambit of the regulation-making power and introduce a number of further safeguards to ensure that the views of the service are fully taken into account. First, we have introduced a requirement for the Home Secretary to consult police authorities and chief officers at an early stage to seek their views on whether regulations are needed in any given case.
	Secondly, we have spelt out much more clearly what the test will be for regulations under this clause. Regulations may be made only where it is necessary, in the national interest, for the service to adopt common procedures or practices in order to facilitate the carrying out by members of any two or more police forces of joint or co-ordinated operations.
	Thirdly, the Central Police Training and Development Authority, in preparing advice for the drawing up of any regulation under this section, is explicitly required to consult police authorities and chief officers.
	Fourthly, and perhaps most significantly, the Home Secretary is required to consider not only the advice of the Central Police Training and Development Authority but must also have advice from Her Majesty's Chief Inspector of Constabulary that states that he is satisfied that the making of a regulation is necessary to meet the test I have just set out.
	These changes not only bring chief officers and police authorities in at every stage and every level, but also introduce Her Majesty's Chief Inspector of Constabulary as an independent assessor of whether given regulations are necessary. The amendments to Schedule 1 introduce like provisions in the case of regulations relating to the National Crime Squad. These Government amendments make significant changes to Clause 7. I should hope that, in the spirit of some of the earlier debates, noble Lords will recognise that and fully endorse the proposed changes. I beg to move.

On Question, amendment agreed to.

Lord Rooker: moved Amendments Nos. 45 to 51:
	Page 6, line 19, leave out "operational"
	Page 6, leave out lines 21 to 26.
	Page 6, line 28, after "from" insert "—
	(a) the chief inspector of constabulary; and"
	Page 6, line 29, at end insert—
	"( ) Before seeking advice under subsection (3) the Secretary of State shall consult about his proposal to do so with—
	(a) persons whom he considers to represent the interests of police authorities; and
	(b) persons whom he considers to represent the interests of chief officers of police."
	Page 6, line 29, at end insert—
	"( ) A request for the purposes of subsection (3) may specify a period within which the requested advice is to be provided; and, if a period is so specified, the requested advice must be provided within it."
	Page 6, line 32, leave out "such" and insert "with—
	(a) persons whom it considers to represent the interests of police authorities;
	(b) persons whom it considers to represent the interests of chief officers of police; and
	(c) such other"
	Page 6, line 32, at end insert—
	"(4A) The Secretary of State shall not make any regulations under this section requiring the adoption of any procedure or practice unless—
	(a) he has, as respects that procedure or practice, received advice from the Central Police Training and Development Authority and has considered that advice;
	(b) the advice of the chief inspector of constabulary states that that inspector is satisfied as to the matters mentioned in subsection (4B); and
	(c) the Secretary of State himself is satisfied as to those matters.
	(4B) Those matters are—
	(a) that the adoption of that procedure or practice is necessary in order to facilitate the carrying out by members of any two or more police forces of joint or co-ordinated operations;
	(b) that the making of regulations is necessary for securing the adoption of that procedure or practice; and
	(c) that securing the adoption of that procedure or practice is in the national interest."
	On Question, amendments agreed to.

Lord Dholakia: moved Amendment No. 52:
	Leave out Clause 7.

Lord Dholakia: My Lords, we have already indicated that the amendments tabled by the Government are extremely welcome. I am pleased to be able again to say to the Minister that we recognise that he has listened to the concerns which have been expressed and sought to respond very constructively. For that we are very grateful.
	With the government amendments, Clause 7 is a very different animal from that which appeared originally. There are now significant limitations on the extent to which the clause can be employed. For example, there is no longer any reference to "operational matters"; regulations can be made only when they assist forces to collaborate; and HMIC has to certify that the regulations are "in the national interest". We recognise that those are very significant changes. However, these changes make it even more difficult to see where and when regulations might be made and what they would cover. The Minister should not take that as a concession. Rather, we should be asking ourselves why—if regulations are to be few and far between, as they must now clearly be—this power is needed at all.
	The Government have now removed any reference to "operational" in Clause 7. It would be helpful to hear from the Minister what types of practices and procedures the Government envisage regulating under Clause 7. In Committee, the Minister mentioned the national intelligence model, but he also suggested that there might be a code of practice. However, as all forces are committed to rolling out the national intelligence model, what use would regulations serve? We on these Benches remain to be convinced that the Home Secretary needs these powers to set local policing policy or practice through national regulation.
	The strength of our system is in tailoring policing to meet the needs and expectations of local communities. Police authorities do want to identify and implement good practice, but imposing something in regulation may not be the answer to that. Clause 7 represents an unnecessary and unwarranted interference by the Home Secretary in local policing. It distorts the tripartite relationship which we have discussed in earlier debates and undermines our system of policing by consent. It should have no place in this particular Bill.

Lord Renton: My Lords, I, too, have very grave doubts about Clause 7. The trouble is that circumstances vary so much, both geographically and in relation to population, in so many different parts of England, Wales and Scotland. Just consider the difference between, for example, East Anglia, where I live, and the metropolis of London, where I have to live when I am working. However, even the difference between East Anglia and Cumbria is really rather remarkable. In Wales—which I know quite well—the roads never seem to lead anywhere.
	It is going to be a terrible challenge for the Home Office to have to expect the Secretary of State by regulations to make provision for all police forces in England and Wales, requiring them,
	"to adopt particular operational procedures or practices; or . . . to adopt operational procedures or practices of a particular description".
	I was in the Home Office for four-and-a-half years where my responsibilities included answering questions on police matters. To expect Home Office officials to know all the circumstances when they vary so much locally and geographically in England and Wales to be able to regulate operational procedures is not feasible.
	I therefore support the noble Lord, Lord Dholakia, in his suggestion that the clause should not stand part of the Bill.

Lord Rooker: My Lords, I respect entirely the way in which the noble Lord, Lord Dholakia, made his case. The previous group of amendments, which we have just approved, effectively changed Clause 7 dramatically. I do not wish to go over the debate again as that would be counter-productive. An example of a change is the removal of the word "operational". The amendments, as a package, will introduce the following steps that the Secretary of State will be required to take before making regulations under Clause 7.
	He will consult representatives of police authorities and chief officers about any proposal and will seek advice from HM Inspectorate of Constabulary and the Central Police Training and Development Authority on the introduction of a regulation. He will then seek advice on the proposed regulation from HMIC and the CPTDA. He will specify a time frame within which that advice must be delivered. Before providing any advice to the Secretary of State, the CPTDA will be required to consult representatives of police authorities and chief officers as well as anyone else it sees fit. Following that advice, before making the regulation, the Secretary of State must have received and considered advice from the CPTDA. He and HMIC must be satisfied that the adoption of a particular procedure is necessary to facilitate joint co-ordinated operations between two or more forces. In making the regulations it is necessary to secure the adoption of that procedure and securing that procedure is in the national interest.
	That is a summary of the previous group of amendments which I hope makes the case for retaining Clause 7. I do not propose to use the extensive notes that I have to defend Clause 7 because it has been radically changed. I am not saying that the case made by the noble Lord, Lord Dholakia, was not a strong one from his point of view—far from it. But the previous group of amendments that we approved go a substantial way down the road. I shall not talk about roads in Wales that lead nowhere. It may not get the noble Lord, Lord Renton, into trouble, but it will get me into trouble.
	It is better to have Clause 7, as amended, in the Bill. We have considered many of the points that were made, especially in Committee, where the genesis of the amendments were discussed. I therefore hope that your Lordships will leave Clause 7, as amended, in the Bill.

Lord Dholakia: My Lords, I am grateful to the Minister. His remarks require some study and I shall read them carefully. If need be, we can discuss the matter again at Third Reading. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Schedule 1 [Powers of the Secretary of State in Relation to NCIS and NCS]:

Lord Rooker: moved Amendments Nos. 53 and 54:
	Page 85, line 22, leave out "shall consult such persons as it" and insert "("the CPTDA") shall consult with—
	(a) the NCIS Service Authority;
	(b) the Director General of NCIS;
	(c) persons whom the CPTDA considers to represent the interests of police authorities;
	(d) persons whom the CPTDA considers to represent the interests of chief officers of police; and
	(e) such other persons as the CPTDA"
	Page 85, line 24, at end insert—
	"(5A) The Secretary of State shall lay any code of practice issued by him under this section, and any revisions of any such code, before Parliament.
	(5B) The Secretary of State shall not be required by subsection (5A) to lay before Parliament, or may exclude from what he does so lay, anything the publication of which, in his opinion—
	(a) would be against the interests of national security;
	(b) could prejudice the prevention or detection of crime or the apprehension or prosecution of offenders; or
	(c) could jeopardise the safety of any person."
	On Question, amendments agreed to.
	[Amendment No. 55 not moved.]

Lord Rooker: moved Amendments Nos. 56 and 57:
	Page 86, line 11, leave out "shall consult such persons as it" and insert "("the CPTDA") shall consult with—
	(a) the NCS Service Authority;
	(b) the Director General of the National Crime Squad;
	(c) persons whom the CPTDA considers to represent the interests of police authorities;
	(d) persons whom the CPTDA considers to represent the interests of chief officers of police; and
	(e) such other persons as the CPTDA"
	Page 86, line 11, at end insert—
	"(4A) The Secretary of State shall lay any code of practice issued by him under this section, and any revisions of any such code, before Parliament.
	(4B) The Secretary of State shall not be required by subsection (4A) to lay before Parliament, or may exclude from what he does so lay, anything the publication of which, in his opinion—
	(a) would be against the interests of national security;
	(b) could prejudice the prevention or detection of crime or the apprehension or prosecution of offenders; or
	(c) could jeopardise the safety of any person."
	On Question, amendments agreed to.
	[Amendments Nos. 58 and 59 not moved.]

Lord Rooker: moved Amendments Nos. 60 and 61:
	Page 86, line 29, after "such" insert "remedial"
	Page 86, line 30, at end insert—
	"(1A) Those remedial measures must not relate to any matter other than—
	(a) a matter by reference to which the report contains a statement of opinion falling within subsection (1)(a) or (b); or
	(b) a matter that the Secretary of State considers relevant to any matter falling within paragraph (a)."
	On Question, amendments agreed to.
	[Amendment No. 62 not moved.]

Lord Rooker: moved Amendments Nos. 63 to 65:
	Page 86, line 40, after "such" insert "remedial"
	Page 86, line 41, at end insert—
	"(3) Those remedial measures must not relate to any matter other than—
	(a) a matter by reference to which the report contains a statement of opinion falling within subsection (2)(a) or (b); or
	(b) a matter that the Scottish Ministers consider relevant to any matter falling within paragraph (a)."
	Page 86, line 41, at end insert—
	"(4) If the Secretary of State exercises his power to give a direction under this section—
	(a) he shall prepare a report on his exercise of that power; and
	(b) he shall lay that report before Parliament.
	(5) If the Scottish Ministers exercise their power to give a direction under this section—
	(a) they shall prepare a report on their exercise of that power; and
	(b) they shall lay that report before the Scottish Parliament.
	(6) A report under subsection (4) or (5)—
	(a) shall be prepared at such time as the Secretary of State considers or, as the case may be, the Scottish Ministers consider appropriate; and
	(b) may relate to more than one exercise of the power to give a direction under this section."
	On Question, amendments agreed to.
	[Amendment No. 66, as an amendment to Amendment No. 65, not moved.]
	[Amendment No. 67 not moved.]

Lord Rooker: moved Amendments Nos. 68 to 70:
	Page 87, line 13, after "such" insert "remedial"
	Page 87, line 13, at end insert—
	"(2) Those remedial measures must not relate to any matter other than—
	(a) a matter by reference to which the report contains a statement of opinion falling within subsection (1)(a) or (b); or
	(b) a matter that the Secretary of State considers relevant to any matter falling within paragraph (a)."
	Page 87, line 13, at end insert—
	"(3) If the Secretary of State exercises his power to give a direction under this section—
	(a) he shall prepare a report on his exercise of that power; and
	(b) he shall lay that report before Parliament.
	(4) A report under subsection (3)—
	(a) shall be prepared at such time as the Secretary of State considers appropriate; and
	(b) may relate to more than one exercise of the power to give a direction under this section."
	On Question, amendments agreed to.
	[Amendment No. 71, as an amendment to Amendment No. 70, not moved.]
	[Amendments Nos. 72 to 82 not moved.]
	[Amendment No. 83, as an amendment to Amendment No. 82, not moved.]
	[Amendments Nos. 84 to 92 not moved.]
	[Amendment No. 93, as an amendment to Amendment No. 92, not moved.]
	[Amendment No. 94 not moved.]

Lord Rooker: moved Amendment No. 95:
	Page 90, line 35, leave out "such persons as he" and insert "with—
	(a) the Service Authority for the National Crime Squad;
	(b) the Director General of that Squad;
	(c) persons whom the Secretary of State considers to represent the interests of police authorities;
	(d) persons whom the Secretary of State considers to represent the interests of chief officers of police; and
	(e) such other persons as the Secretary of State"
	On Question, amendment agreed to.
	[Amendment No. 96 not moved.]

Lord Rooker: moved Amendments Nos. 97 to 103:
	Page 91, line 6, leave out "operational"
	Page 91, line 7, leave out "operational"
	Page 91, line 10, after "from" insert "—
	(a) the chief inspector of constabulary; and"
	Page 91, line 11, at end insert—
	"( ) A request for the purposes of subsection (2) may specify a period within which the requested advice is to be provided; and, if a period is so specified, the requested advice must be provided within it."
	Page 91, line 11, at end insert—
	"( ) Before seeking advice under subsection (2) the Secretary of State shall consult about his proposal to do so with—
	(a) persons whom he considers to represent the interests of police authorities; and
	(b) persons whom he considers to represent the interests of chief officers of police."
	Page 91, line 14, leave out "shall consult such persons as it" and insert "("the CPTDA") shall consult with—
	(a) the NCS Service Authority;
	(b) the Director General of the National Crime Squad;
	(c) persons whom the CPTDA considers to represent the interests of police authorities;
	(d) persons whom the CPTDA considers to represent the interests of chief officers of police; and
	(e) such other persons as the CPTDA"
	Page 91, line 14, at end insert—
	"(3A) The Secretary of State shall not make any regulations under this section requiring the adoption of any procedure or practice unless—
	(a) he has, as respects that procedure or practice, received advice from the Central Police Training and Development Authority and has considered that advice; and
	(b) the advice of the chief inspector of constabulary states that that inspector is satisfied as to the matters mentioned in subsection (3B); and
	(c) the Secretary of State himself is satisfied as to those matters.
	(3B) Those matters are—
	(a) that the adoption of that procedure or practice is necessary in order to facilitate the carrying out by members of the National Crime Squad and of any one or more police forces of joint or co-ordinated operations;
	(b) that the making of regulations is necessary for securing the adoption of that procedure or practice; and
	(c) that securing the adoption of that procedure or practice is in the national interest."
	On Question, amendments agreed to.
	Clause 9 [The Independent Police Complaints Commission]:

Lord Rooker: moved Amendment No. 104:
	Page 7, line 18, leave out "at any time"

Lord Rooker: My Lords, I shall also speak to Amendment No. 105. The first amendment is a drafting amendment as the words to be left out are superfluous.
	The second is in response to an amendment tabled in Committee by the noble Lord, Lord Dixon-Smith, and the noble Viscount, Lord Bridgeman. I said then that accredited persons will be members of the extended police family and, as such, will work closely with the police. Although they are not employed by a chief constable and they exercise very limited police powers, it would not make sense to have on the commission someone who is doing that job, or who has done that job. It is possible that they will be viewed as lacking in independence and objectivity because of their association with police work. Therefore, I am fulfilling a commitment to return with an amendment. I beg to move.

Lord Dixon-Smith: My Lords, I welcome Amendment No. 105, which we are grateful to see on the Marshalled List.

On Question, amendment agreed to.

Lord Rooker: moved Amendment No. 105:
	Page 7, line 20, at end insert—
	"( ) he is a person in relation to whom an accreditation under section 36 is or has been in force;"
	On Question, amendment agreed to.
	Schedule 2 [The Independent Police Complaints Commission]:

Viscount Bridgeman: moved Amendment No. 106:
	Page 94, line 5, leave out sub-paragraph (3).

Viscount Bridgeman: My Lords, Amendment No. 106 refers to the power of the Secretary of State to appoint the first chief executive and to approve the appointment of subsequent chief executives.
	In Committee, the noble Lord, Lord Bassam, said that the Government were 100 per cent in favour of independence. That must surely mean what it says. This is probably the most sensitive of any appeal tribunal in this country and it is essential that it should be transparent. The power of the Secretary of State to have an effective veto over the appointment of the chief executive into the indefinite future must surely be resisted. I beg to move.

Lord Rooker: My Lords, I appreciate the noble Viscount's point about this being an important independent body and it must be seen to be so. As we said earlier, it will be much more powerful and much better resourced than the existing complaints authority.
	It is essential for the Secretary of State to be able to appoint the first chief executive of the commission. I am not making a big thing about this, but it is sometimes the practice for the Secretary of State to appoint the first chief executive of a non-departmental public body. I may have used the analogy in the past—it is the one I had experience of as a Minister—of the Foods Standards Agency although I was at MAFF and therefore not responsible and had left MAFF by the time the agency was set up. However, I took the legislation through its various stages and it was my baby as a White Paper as well. I was very conscious of the fact that that was not a non-departmental public body. It was set up as a non-ministerial department, so the structure was slightly different in the way the department went about making the appointments.
	There is a good case for making an early appointment of a chief executive in advance of the appointment of the board members. The chief executive will need to be in place well before the commission is formally set up to take forward the establishment of the commission and its operating procedures. The chief executive will be the accounting officer of the body. If the chief executive is not in place to do that, I have to say to the House—resting on the prejudices of some noble Lords, although of none present—that it will be left to the Home Office to do it; and some people may not like the Home Office doing that work and then handing over to the chief executive. It is a less than satisfactory way of proceeding.
	However, I want to make it clear that there is no suggestion that the Home Secretary will be able to put his own man or woman in the post. The first chief executive will be recruited in an open and fair process according to established practice; that is, by public advertisement and proper sifting procedures.
	As with other members of the staff of the commission, the chief executive will be an employee of the commission and under its direction and control. Obviously the chief executive will have to satisfy the commission that he is performing satisfactorily. The commission's chair and members will then select subsequent chief executives. It must be borne in mind that, whatever the process of the Secretary of State approving the appointment, the Secretary of State will be in no position to put forward his own person as the chief executive. The commission will put forward the name. It may be that it puts forward a name to which the Home Secretary objects. But the Home Secretary is not then allowed to put another name in position. It is the commission's right to do that. The Secretary of State's right is only to refuse or approve a nomination.
	Furthermore, the chair and commission members will define the role and duties of the chief executive. The Secretary of State will only be able to refuse or approve the role rather than prescribe it. There is no suggestion that the Secretary of State's approval will compromise the independence of the commission or that he can place his own representative there to mould it according to his wishes. He cannot. The commission will be appointed by the Commissioner for Public Appointments through the proper process.
	The power of the Secretary of State to give approval is an important safeguard for the Government, mainly to ensure that the appointee is appropriate to the position. In establishing new non-departmental public bodies, it is important to have in place checks and balances. I do not say that this is the same process in every case, but there are many non-departmental public bodies in existence.
	As I said, the chief executive will be the accounting officer. The Government need to be satisfied that the selection process was open and fair and in line with established best practice. At the end of the day the Home Secretary has an oversight role of the operation of the commission and the police complaints system generally, for which of course he is accountable to Parliament. Parliament will be in a better position to be able to hold the Government to account for the commission's effectiveness if the Home Secretary is in the seat for approving the commission's selection of the chief executive. The Home Secretary will not be able to run away and say, "It was nothing to do with me, guv. The commission appointed this person". From Parliament's point of view, that is a better position than any of the alternatives, which would mean that the Home Secretary had no role at all.

Viscount Bridgeman: My Lords, I am grateful to the Minister for that comprehensive reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 107 not moved.]
	Clause 10 [General functions of the Commission]:
	[Amendments Nos. 108 and 109 not moved.]
	Clause 11 [Reports to the Secretary of State]:

Viscount Bridgeman: moved Amendment No. 110:
	Page 10, line 7, leave out paragraphs (a) and (b).

Viscount Bridgeman: My Lords, in Committee the Minister gave an assurance that in the delivery of reports there would be a presumption in favour of publication, and that was very much to be welcomed. But taking into account what the Minister said about the previous amendment, this is a very much more subjective decision for the Secretary of State and we must once again look to future Secretaries of State whose armour may not necessarily be shining with the brilliance of that held by the present incumbent. We would be very much happier if the presumption of publication could be enshrined in this clause. I make a further suggestion to the Minister that it might be possible to have the condition turned around so that only in exceptional circumstances would the report not be published. I ask for the Minister's views. I beg to move.

Lord Bassam of Brighton: My Lords, the noble Viscount moved this amendment at Committee stage. We are not of a mind to offer a different response now. I shall carefully explain why.
	This amendment would require the Secretary of State to lay before Parliament and cause to be published every report that it receives from the Independent Police Complaints Commission. On the face of it that seems to be a reasonable proposition, but we argue that it could be potentially harmful to the public interest if the legislation demands that all reports are published.
	It is highly likely that this amendment would result in reports not being written at all by the commission or useful information being excluded because it would be considered as potentially harmful. It is right that the commission's annual report will have to be laid before Parliament and published.
	As regards other reports, the Secretary of State should have some discretion as to whether to publish or not, having considered all relevant factors. For example, a report might contain sensitive, potentially harmful information or recommendations about police practices, which, were they to be made public, would damage future police operations. I believe that this House is agreed that the police must have flexibility over police operational matters. After all, it is their domain—policy on one side and operational matters on the other.
	The discretion provided in the clause allows the Secretary of State to balance the need for conflicting public interest arguments for and against disclosure of such reports. In this context no doubt he will be aware that it would be possible for reports to be released with any sensitive information removed.
	The amendment could be self-defeating and that is the kernel of our argument. Normally, we would want to argue for maximum disclosure, but in certain circumstances where that disclosure would be harmful to the service or operations, we believe that the Home Secretary needs to have that flexibility and to exercise his or her discretion in future. For those reasons I invite the noble Viscount to withdraw the amendment.

Viscount Bridgeman: My Lords, the Minister holds his ground. I accept his explanation and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 12 [Complaints, matters and persons to which Part 2 applies]:

Viscount Bridgeman: moved Amendment No. 111:
	Page 11, line 15, leave out from "public" to end of line 19.

Viscount Bridgeman: This again is an amendment which was moved at Committee stage. We consider that the category of individuals who can make complaints remains too restrictive. We appreciate that the administration of the commission must be had regard to, which is a point made by the Minister at Committee.
	But we believe that this is a very sensitive area and there must surely be provision for the informed whistle-blower. That is not provided for in the complaints catchment at the moment and in certain circumstances it could be very useful. Will the Minister consider this amendment? I beg to move.

Lord Rooker: My Lords, I fully accept the reason why the noble Viscount has returned with this amendment. I have no doubt that this is not the last time when this particular issue will be raised during the passage of the Bill.
	We have tried to embrace in Part 2 of the Bill the principle of much greater accessibility to the police complaints system. We have more explicitly defined than in existing legislation who can make a complaint. This will, therefore, replace any scope for the use of discretion over the recording of complaints with much more consistency and clarity.
	We have also provided the would-be complainant with a right to appeal to the commission against the non-recording of a complaint. This right of appeal is predicated on the fact that while the definition of a complaint is a wide one, it also sensibly limits complaints to those made by people who are likely to have a relevant connection with the police conduct under question.
	We want a system under which the conduct of anyone serving with the police, which has an adverse effect on a member of the public, is dealt with efficiently and effectively. That is why it is not just "victims" who will be able to make a complaint. People who can make a complaint will also include "witnesses". I gave one example during Committee stage, as I recall. That is people who have full control of a CCTV system, for example. Also, people acting on behalf of "victims" or "witnesses" will have the right to make a complaint. It is also why people who may be apprehensive about approaching the police, which I fully understand, will also be able to make complaints through "gateways", that is to say, through certain community organisations and individuals who have regular contact with members of the public.
	While I do not want to open up a new debate, it may be that this will cover the area of the informed whistle-blower referred to by the noble Viscount. However, these amendments would enable any member of the public to complain about the conduct of anyone serving with the police whether or not they had any connection with the incident or would be able to contribute in any way towards an investigation.
	These amendments, coupled with the right of appeal, would radically change the nature of the system by creating a significant amount of additional administrative work for the police and the commission. It would mean that any and all allegations might wend their way through the system, taking up time and resources disproportionate to the importance of the complaint.
	The intention is to open up the system so that conduct by anyone serving with the police which has an adverse effect on a member of the public is dealt with, while ensuring that that is done properly. Members of the public who, for various reasons, do not want to make direct complaints to the police can do so through others. They will have a connection with the complaint. The change proposed would jeopardise that, which I do not believe would be in anyone's interest.

Lord Brooke of Sutton Mandeville: My Lords, I recollect that at such an hour in Committee the Government introduced a measure that gave the commission authority to initiate an inquiry of its own on which my noble friend Lord Renton animadverted at the time. Was the Minister thinking of that in relation to what he has just said, or was that quite a separate matter?

Lord Rooker: My Lords, that is a separate matter. I see noble Lords nodding. If a category of people has a connection with an incident in which the public have been treated badly by someone serving in the police or working for the police authority and that category is not covered by what I have said, I would be pleased to hear about it. We do not want to rule that out.
	We do not want to give carte blanche so that anyone who reads something in the media can make a complaint and have the right of appeal and all the other rights that go with the new process. We do not seek to stop anyone who has a complaint relating to themselves or to a friend dealing with it through a go-between or through a third party, but there has to be a connection with someone who has been badly treated by the police. If the matter is left wide open, it will not take long for someone who wants to create a mountain of paperwork to work out how to clog up the system as an act of policy. The point raised by the noble Lord, Lord Brooke, relates to the fact that the commission itself—it is a powerful commission—can initiate inquiries about complaints, but that has nothing to do with the substance of this amendment.

Lord Brooke of Sutton Mandeville: My Lords, I have one question arising out of that. I have no difficulty in accepting why the Government are anxious to prevent people who have no connection with a case starting hares running. In terms of the points raised by my noble friend in moving the amendment in relation to whistle-blowers, it is presumably conceivably the case that the commission might act on a whistle-blower's contribution.

Lord Rooker: My Lords, if the commission knew who the whistle-blower was, and the complaint was made to the commission by the whistle-blower but he did not want to do it publicly, it may be up to the commission to take that on board. Alternatively, I think that the whistle-blower would be able to complain to the commission through another party—a friend or an organisation. We are not closing off the opportunity for the complaint to be made if the person concerned is operating as a whistle-blower, by which I am assuming that he is someone inside the organisation or the police. It is not unknown for that to happen. We do not want to exclude that in any way, shape or form, but the complaint has to be about someone who was badly treated by the police. It is difficult to conceive of the circumstances. If noble Lords can come up with better examples, I shall try to come up with a better answer.

Lord Dixon-Smith: My Lords, I am sure that we are all working for the same purpose, which is to make the new commission work as well and as efficiently as possible. We appear to be discussing whether, in drafting legislation, we can make a judgment about the validity of a complaint, or whether it is better to leave the commission to make such a judgment when it receives the complaint. I believe that that is what my noble friend Lord Bridgeman is proposing.

Viscount Bridgeman: My Lords, in mentioning a whistle-blower, I meant someone who is totally independent. I did not mean an inside person. I have carefully noted what the Minister has said. If there is a possibility of expanding the category slightly, perhaps we can return to the point at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 112 not moved.]

Lord Dixon-Smith: moved Amendment No. 113:
	Page 12, line 15, at end insert "; or
	(d) he is an accredited person for the purposes of section 35"

Lord Dixon-Smith: My Lords, Clause 12 defines who can be the subject of a complaint to the complaints commission. We believe that the clause is inadequate. Unless we manage later to implement some other changes, we shall have people exercising police powers on the streets who are not subject to normal police discipline nor to the complaints commission.
	We think that that is an omission which should be corrected. I accept that we debated the issue in Committee but we believe that we should return to the matter. We are clear that the ultimate supervision of people who act with police powers has to be, first, by the police and, ultimately, if it comes to a question of complaint, through the police complaints commission.
	A difference of principle exists between ourselves and the Government. However, we do not apologise for again raising the matter. I beg to move.

Lord Rooker: My Lords, no noble Lord needs to apologise for bringing matters back on Report. I make no complaint about that. I am switching back to emollient mode at the moment. I mean that because we could look at issues three or four times. We may think that we have got it right but we can always have a second look. The noble Lord is right: there is a matter of principle. These people are not employed by the chief constable. They are not employed by the police authority. By definition they are well outside the police family. They are part of the extended police family. They have an employer because they are part of the accredited system. The individual or the employer would not be accredited unless the employer had a good complaints system. If things go wrong, the ultimate sanction is for the chief constable to remove the accreditation of that person or organisation.
	My right honourable friend and I have discussed the matters raised. I give an example to the House. There are organisations with powers over people. Examples include neighbourhood street wardens and dog wardens. In some parts of the country there are still park keepers. Environmental health officers have fairly substantial powers. Those are not police powers but they are similar to the powers used by the accredited person. No one has suggested that they should be brought within the remit of a police complaints authority. The employer should have a satisfactory system for complaints about such persons. At the end of the day, the issue can go to the independent ombudsman as well as to elected councillors.
	A strong case cannot be argued. As the noble Lord, Lord Dixon-Smith, said, it is a point of principle. If it is inappropriate to use the new independent police complaints commission for existing local authority employees, it is equally inappropriate to bring accredited community safety officers within the commission's jurisdiction. We have a problem. The accreditation process is meant to help the police by providing a co-ordinated response from other sections of the community, whether shopping centre wardens, local authority guards or private sector security people. Theirs is a more hands-on role. They will have to keep their house in order or they will lose their accreditation. Without accreditation some of those people will go out of business. The shopping centre will not use an unaccredited person under this system. It will become the norm that people not approved by the local chief of police will be told, "Sorry, we don't want you or your staff". That will be important for the public perception. Where people are guarding premises, looking after shopping centres and so on, it will be a comfort to the public to know that the chief of police has had a role in who is doing the "policing".
	If an accredited person is alleged to have committed a crime, the police will investigate that matter as with any other. The allegation of misconduct breaches the employer's disciplinary code. If the employer does nothing about it, that is unsatisfactory. The ultimate sanction is that the employer loses the accreditation of the people; that is, he will go out of business. That is quite a sanction.

Lord Dixon-Smith: My Lords, the Minister gave a full and good reply, but the difference between us remains. The difficulty is that his ultimate sanction, the removal of accreditation from an employer, will not necessarily provide adequate satisfaction to someone who runs into difficulty with an accredited person exercising a police power. One can envisage a circumstance in a shopping centre where someone says, "You shouldn't be doing this" or, "You've been drinking too much" and tries to confiscate alcohol from some young people or something like that. That may lead to an unjustifiable argument which turns violent and then becomes an affray and one gets into the business of who is responsible.
	That could cause immense difficulty. The situation would not be as easy to deal with if one was dealing with a commercial group such as Securicor or Group 4, as with employees of a local authority, where one might meet a slightly different attitude. Unless we can persuade the Government to move on the matter it will be difficult to persuade commercial firms to become involved and take the risk, however good their complaints procedure may be. It is not a question of complaints procedure so much as liability. Complaints procedure is one thing, but liability is another. When one sees what happens nowadays when the courts argue liability, it is a different situation.
	I will study the Minister's response. It does not satisfy me now and we may need to return to the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Schedule 3 [Handling of Complaints and Conduct matters etc.]

Viscount Bridgeman: moved Amendment No. 114:
	Page 105, line 45, leave out from "with" to end of line 2 on page 106.

Viscount Bridgeman: My Lords, the only point in moving the amendment is to inquire whether the phrase we have suggested deleting is otiose and whether the clause would have the same meaning without it. I beg to move.

Lord Bassam of Brighton: My Lords, the short answer is "No"; it is not otiose. Subparagraph (7) of paragraph 10 of Schedule 3 is designed to allow flexibility to make regulations for the time periods with respect to the requirements of paragraph 10 in relation to conduct matters arising from civil claims.
	I will explain further because the matter is worth putting on the record. The words the amendment seeks to delete are useful because, unlike the normal situation where a complaint is made to the police, the paragraph is concerned with circumstances where police conduct is challenged in the civil courts; for example, by an action for assault, false imprisonment or mistreatment.
	It is right in such circumstances that there is greater flexibility in determining when the clock starts ticking and the time period starts running. The proposed deleted words would allow the regulations to empower the independent police complaints commission to determine the appropriate time period for compliance with the requirements, as I said earlier, in relation to an appeal of a civil claim brought out of time. If the words were taken out it would be damaging to the interests of the complainant, and, one would argue, natural justice. They are not otiose; they are essential, but I appreciate the noble Viscount's desire for brevity in legislation.

Viscount Bridgeman: My Lords, I am most grateful for the Minister's very informed explanation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Rooker: moved Amendments No. 115:
	Page 119, line 23, leave out from "proceedings" to "to" in line 24.
	The noble Lords said: My Lords, in moving this amendment I shall speak also to Amendment No. 116. I shall be brief. Under Clause 12, alleged misconduct by anyone serving with the police can be dealt with under the new system. Paragraph 27 of Schedule 3 currently provides for the new complaints commission to make a recommendation and, if necessary, a direction to the appropriate authority regarding the disciplinary proceedings to be brought against,
	"a member of a police force".
	The purpose of these amendments is to extend that power to disciplinary proceedings against both special constables and civilians—that is, civilians employed by the police. It is entirely appropriate for it to be extended to special constables, as the complaints commission will in any event be able to bring, conduct or intervene in disciplinary proceedings against them. The Government believe that it will also be appropriate to extend it to support staff to ensure that the complaints commission will be able to decide that disciplinary proceedings should be brought against a civilian who has committed an act of misconduct. When the complaints commission exercises this power, it will have to take the specific terms and conditions of employment of the civilian into account. I beg to move.
	On Question, amendment agreed to.

Lord Rooker: moved Amendment No. 116:
	Page 119, line 28, leave out "member of police force" and insert "person serving with the police"
	On Question, amendment agreed to.
	Clause 15 [General duties of police authorities, chief officers and inspectors]:

Baroness Harris of Richmond: moved Amendment No. 117:
	Page 12, line 38, leave out "maintaining a police force" and insert "in securing the maintenance of an efficient and effective police force"

Baroness Harris of Richmond: My Lords, we welcome and support the contents of Clause 15. Our amendment seeks to improve it in a way that reflects the current provisions of Section 77 of the Police Act 1996. This requires police authorities not just to keep themselves informed as to the working of the complaints procedures. It goes further and links this to the duty on authorities to maintain an efficient and effective force, and thus gives them scope to act if things are going wrong.
	We welcome the establishment of the new IPCC. But, let us face it, when complaints reach the IPCC it usually means that things have gone seriously wrong somewhere. As we all know, prevention is far better than cure. We want to ensure that police authorities can have in place a rigorous process and structure to oversee all complaints, and to take remedial action where there are concerns.
	I hope that the noble Lord's emollient mode will extend to my moving this amendment, because Clause 15 is important. However, as currently drafted, it does not in our view go quite far enough. Issues relating to complaints, whether to do with the alleged conduct of police staff, or issues relating to direction and control, go to the heart of the efficiency and effectiveness of the force; and they go to the heart of public confidence in policing.
	Section 77 of the Police Act 1996 recognises this by tying oversight of complaints issues to the statutory duty of police authorities to secure the maintenance of an efficient and effective police force. That enables police authorities not just to monitor what is going on, but also to act where the handling of complaints impacts on efficiency or effectiveness.
	Our amendment is based on the wording of Section 77 of the Police Act 1996, which will, of course, be repealed by this Bill. The difference made by the slight change in wording incorporated in the amendment is small, but important. It would ensure full and proper oversight and accountability for complaints. The public should demand no less. I hope that the Minister will feel able to accept the spirit of the amendment. I appreciate that he may well want to consider whether the wording of the amendment can be improved, but the key issue is the principle of effective oversight of the complaints procedures and clear accountability to local communities. I should welcome a commitment that the Government will take the matter away and bring forward proposals at Third Reading. I beg to move.

Lord Bassam of Brighton: My Lords, this is quite an interesting point about the drafting of the provision. I have looked again at the wording and reflected on what the noble Baroness has said. The provision currently places a duty upon police authorities to keep themselves informed—or at least this is what the drafting is about—of the workings of the complaints system.
	We read our provision as being slightly wider than the similar one used in Section 77 of the Police Act 1996, to which the noble Baroness has referred. We cannot see a reason to limit it just to one function of a police authority, when they have others; for example, and in particular—and the noble Baroness and I have talked about this aspect in the past inside and outside the Chamber—of achieving best value. We believe that lessons from the complaints system may be relevant to all the police authority's functions. Our argument really is that the amendment of the noble Baroness is more restrictive than she imagines. We think that our wording is broader.
	We are mindful that the police authority must keep itself informed of the workings of complaints systems so far as is necessary in relation to all its functions, rather than the narrow confines of efficiency and effectiveness. In practice, we do not think that this duty will be very different to the one placed upon police authorities by the current system.
	Therefore, I am not minded to suggest that we want to accept the amendment, but if the noble Baroness writes to us explaining how she feels her amendment broadens rather than narrows the provision—as we argue in defence of our own position—obviously we will reflect on that. We are probably not one million miles apart. We are trying to achieve that necessary breadth because we think that it is in the interests of the public and the police and in the interests of securing an effective and efficient complaints system. I invite the noble Baroness to withdraw her amendment. However, if she wants to give some further thought to the matter we shall certainly listen to her.

Baroness Harris of Richmond: My Lords, I am most grateful to the Minister for giving me the reassurance that he will consider the matter at least if I write to him and further tell him what is proposed. It is important that he also understands that police authorities need to, and do, keep themselves apprised of the procedures. I am reassured by what he says. I shall consider the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 20 [Duty to keep the complainant informed]:

Lord Rooker: moved Amendment No. 118:
	Page 18, line 35, leave out from "required" to end of line 36 and insert "on proportionality grounds"

Lord Rooker: My Lords, in moving Amendment No. 118, I shall speak also to Amendment No. 119. Under Clause 20(6)(iii) the Secretary of State has the power to make regulations to prevent the disclosure of information or investigation reports to complainants to secure that no person is adversely affected by the disclosure.
	In Committee, the noble Viscount, Lord Bridgeman, moved an amendment which had the intention of ensuring that disclosure would not be prevented on the grounds that it would adversely affect the person complained about where the complaint had been upheld. In fact, as I explained then, the duty to keep complainants informed under Clause 20 does not apply at the stage in the process where a complaint may or may not have been upheld. Complaints can only be either upheld or dismissed during disciplinary proceedings by which time any disclosure under this clause will already have taken place. There are separate provisions under Clause 33 for complainants to be involved in disciplinary proceedings.
	Nevertheless, it is important for the sensitivity test under Clause 20(6) to provide for the prevention of disclosure where someone could be adversely affected. A substantial amount of information on the person complained about will often come to light during the course of an investigation, and much of it may have no bearing whatever on the complaint. To disclose that information to the complainant would serve no useful purpose and would unnecessarily breach the privacy of the person complained about.
	However, it has never been the Government's intention to allow the person complained about to prevent disclosure on general grounds that he would be adversely affected. The amendment would make clear that disclosure should be prevented only when it would disproportionately adversely affect someone. It will be explicit in the Bill that in all cases a judgment will need to be made based on the balance between the need to keep the complainant informed and the need to avoid unnecessary breaches of anyone's privacy. I beg to move.

Viscount Bridgeman: My Lords, the provisions are entirely equitable and we support them.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 119:
	Page 18, line 38, at end insert—
	"( ) The non-disclosure of information is required on proportionality grounds if its disclosure would cause, directly or indirectly, an adverse effect which would be disproportionate to the benefits arising from its disclosure."
	On Question, amendment agreed to.
	Clause 21 [Power of the Commission to issue guidance]:

Lord Bassam of Brighton: moved Amendment No. 120:
	Page 19, line 17, at end insert—
	"( ) Before issuing any guidance under this section, the Commission shall consult with—
	(a) persons whom it considers to represent the interests of police authorities;
	(b) persons whom it considers to represent the interests of chief officers of police; and
	(c) such other persons as it thinks fit."

Lord Bassam of Brighton: In moving this amendment, I shall speak also to Amendment No. 122.
	It has always been the Government's intention for the Association of Chief Police Officers, the Association of Police Authorities and others to be consulted before issuing regulations and guidance. For that reason, we were happy to give fair consideration to the proposals made at the Committee stage by the noble Lord, Lord Bradshaw, and to return today with something that reflects what was sought.
	The effect of Amendment No. 120 will be to place an obligation on the independent police complaints commission to consult people representing the interests of police authorities, chief officers and others on guidance that it intends to issue before seeking the approval of the Secretary of State to issue that guidance.
	The government amendment varies from the amendment moved in Committee in that it will require the commission to consult on guidance that it intends to issue before seeking the approval of the Secretary of State to issue that guidance, whereas the amendment moved in Committee would have required the Secretary of State to consult before giving his approval.
	The reason for that is that the commission will want to take account of the views of the key players in drawing up the guidance and it would therefore not be appropriate for the Secretary of State to consult them again. To do so would mean either the key players having to confirm their views or, if they were not reflected in the guidance, a risk that the independence of the commission would be impugned if the Secretary of State sought to introduce those views into the guidance.
	Similarly, the effect of Amendment No. 122 would be to place an obligation on the Secretary of State to consult before making regulations under Part 2. In addition to persons representing chief officers and police authorities, the consultees would naturally also include the independent police complaints commission. So our amendments reflect the spirit of what the noble Lord, Lord Bradshaw, proposed, but also respect the independence of the new independent police complaints commission. I beg to move.

Lord Bradshaw: My Lords, I rise simply to thank the Minister for his consideration.

On Question, amendment agreed to.
	Clause 22 [Regulations]:
	[Amendment No. 121 not moved.]

Lord Rooker: moved Amendment No. 122:
	After Clause 22, insert the following new clause—
	"CONSULTATION ON REGULATIONS
	Before making any regulations under this Part, the Secretary of State shall consult with—
	(a) the Commission;
	(b) persons whom he considers to represent the interests of police authorities;
	(c) persons whom he considers to represent the interests of chief officers of police; and
	(d) such other persons as he thinks fit."
	On Question, amendment agreed to.

Lord Rooker: moved Amendment No. 123:
	After Clause 28, insert the following new clause—
	"PROCEDURAL REQUIREMENTS FOR REMOVAL OF SENIOR OFFICERS
	(1) In subsection (2) of section 9E of the 1996 Act (removal of Commissioner of Police of the Metropolis) for the words from "an opportunity" to the end there shall be substituted "—
	(a) an explanation in writing of the Authority's grounds for calling upon him, in the interests of efficiency or effectiveness, to retire or to resign; and
	(b) an opportunity to make representations;
	and the Authority shall consider any representations made by or on behalf of the Commissioner.
	The opportunity given to the Commissioner to make representations must include the opportunity to make them in person."
	(2) In subsection (3) of section 11 of the 1996 Act (removal of chief officer of police), for the words from "an opportunity" to the end there shall be substituted "—
	(a) an explanation in writing of the authority's grounds for calling upon him, in the interests of efficiency or effectiveness, to retire or to resign; and
	(b) an opportunity to make representations;
	and the authority shall consider any representations made by or on behalf of the chief officer.
	The opportunity given to the chief constable to make representations must include the opportunity to make them in person."

Lord Rooker: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 125, 128, 129 and 130. The Government share the wish that an officer who is subject to proceedings should have a full and fair opportunity to present his or her case. The government amendments will have that effect. They will go a substantial way to meet the intended effects of Amendments Nos. 124, 126 and 127, although we disagree with some aspects of them.
	The new clause inserted by Amendment No. 123 will require three distinct courses of action: first, the officer would have to be given an explanation, in writing, of the police authority's grounds for calling on him or her to retire or resign; secondly, the officer would have the right to make representations, in writing, in person or through someone acting on his or her behalf; thirdly, the police authority would be under a statutory duty to consider those representations.
	Correspondingly, in cases in which the Secretary of State intervenes under Section 42, Amendment No. 125 provides for the officer to be given notice of the Home Secretary's intention to intervene and a written explanation of his reasons for doing so. Amendment No. 128 provides for the right to be heard by the inquiry and for the officer to be heard in person. That amendment also provides a statutory right for the police authority to make representations to the inquiry if it wishes. Amendment No. 129 is a consequential amendment and merely ensures that an officer's right to a written explanation from the police authority is disapplied in a Section 42 case, for which the explanation will come from the Secretary of State.
	I hope that, following our debate in Committee, I have been able to persuade the House that the purpose of Amendment No. 126 has been achieved and that retention of the inquiry provisions for Section 42 cases, at which Amendment No. 127 appears to be aimed, is part of the Bill.
	With regard to Amendment No. 124, as I said, the police authority would be able to put its views to the Section 42 inquiry. The amendment would go further and introduce a statutory process of consideration of representations for suspension cases. In the Government's view, consultation will be the norm, where such cases arise. There may be cases in which urgent and critical action is vital. If such a serious situation arose, it would not be right to inhibit the capacity of the Secretary of State to move swiftly, if circumstances made it imperative.
	Government Amendment No. 130 creates a requirement for consultations to include representatives of police authorities and chief officers before regulations are made in respect of Part 3.
	In moving Amendment No. 123, I hope that I have touched on some of the amendments tabled by noble Lords. I beg to move.

Baroness Harris of Richmond: My Lords, I rise to speak to Amendment No. 124. The Government's amendments to Part 3 of the Bill are welcome. They provide additional important safeguards in cases where a chief officer is forced to retire or resign. That is right. However, those safeguards apply only in cases in which the decision has, in effect, been taken to exercise the power; that is right at the end of the process. There should be an earlier dialogue between the Home Secretary and the police authority, before the Home Secretary tells the authority to remove its chief officer.
	I am sure that the Minister will tell me that that dialogue will go on and that the Home Secretary will not simply get out of bed one morning and issue a peremptory order that a particular chief constable must go. However, it would be more reassuring if that safeguard were built into and reflected in the legislation.
	We made it clear at Second Reading that we have considerable difficulty with the idea that the Home Secretary should have the power to require a police authority to suspend its chief officer. We are not persuaded that the Home Secretary should second-guess the judgment of the authority on whether local confidence in the force demands that the chief officer be suspended. That is a matter for the local community and its representatives; namely, the police authority. I see that the Minister accepts that argument.
	If the Home Secretary insists on taking the power, we would be considerably reassured if, before exercising it in any given case, he were required by statute to consult the police authority concerned and consider its views. Currently, the Bill simply gives the authority the opportunity to make representations after the Home Secretary has reached a conclusion. The effect of our amendment would be quite simple. It would require the Secretary of State to consult and to have regard to representations received. That should be enshrined in the Bill.
	The Minister has assured us that it is a power of last resort, but the Home Secretary may come under considerable pressure from the media and others to use the power as an instant response. We would not want that to happen. Our amendment would help to ensure that the power was used only after full and thorough consideration. We believe that it would protect the operational independence of a chief constable, to which we on these Benches are deeply committed. As I said earlier, this provision would provide a buffer between the Home Secretary of the day and the potential for direct interference and undue influence. I strongly urge the Minister to give this amendment serious consideration. In no way does it undermine the Government's aims; rather it seeks simply to improve the process.

Lord Dixon-Smith: My Lords, I have tabled two amendments in this grouping, Amendments Nos. 126 and 127. Amendment No. 126 seeks to ensure that the person affected by the decision of the Secretary of State in Clause 30 has an opportunity to make representations in writing or, indeed, via a third party acting on his behalf.
	Amendment No. 127 is perhaps the more significant amendment. It quite deliberately seeks to introduce an independent third party into the process. A question is wrapped up in all this; that is, is there any potential conflict with the processes set out in the human rights legislation which one would normally expect to apply? It is a cause for real concern. If the Secretary of State comes to the conclusion—it may be a perfectly valid conclusion—that a chief constable or commissioner has to go, and he then goes to the authority, that authority has to comply and act in response to the request put by the Secretary of State. So we have here a one-way track.
	We need to ask how independent are the existing procedures. We may be dealing with, if not a Commissioner of the Met, then a chief constable of around the age of 40. The loss of employment at that age presents real difficulties with regard to the possibility of securing alternative employment. The dispute may have arisen over a difference of opinion, shall we say, rather than over a matter of real substance. Without the intervention of some form of third party, this seems to pose particular problems.
	We felt that it was worth tabling Amendment No. 127 simply to open up the issue to debate. At one point the facetious suggestion was made that chief constables do not in fact have any human rights, but of course that is absolute nonsense. I have to say that, on looking again at the matter, we decided that this is compliant with human rights legislation because, as a last resort, the chief constable can go to judicial review, which would impose an independent appeal. However, that also imposes huge costs and risks and thus could be extremely difficult.
	We are dealing with the futures of people holding senior office. If they happen to be high-flying staff who arrive in senior posts while they are still young, then we are not dealing only with matters of salary and the security of a family, we are dealing with a person's potential in the pensions arena. This is very much a lifetime matter.
	I ask the Minister to consider seriously whether we have struck exactly the right balance in these clauses. Even if Amendment No. 127 does not provide the right way of going about it, perhaps we ought to look again at this issue. I am not absolutely convinced that we have got it right at the present time.

Lord Rooker: My Lords, I shall be brief. Amendment No. 127 is otiose. It appears to assume that the requirement to appoint an inquiry in Section 42 cases has been removed, but the Bill retains that requirement. I hope that that answers the noble Lord.
	As to the amendment of the noble Baroness, I am happy to consider the points she made. I do not want to repeat what I said about Amendment No. 124, but the best way to prescribe those matters is in the context of the regulations. The points she makes are valid and will not be forgotten. Consultation will be the norm—I hope that is taken as read—but there are cases where urgent action is vital. We shall look at this in the context of the regulations.

On Question, amendment agreed to.
	Clause 30 [Removal etc. of senior officers at the instance of the Secretary of State]:
	[Amendment No. 124 not moved.]

Lord Rooker: moved Amendment No. 125:
	Page 30, line 16, leave out from "give" to "and" in line 19 and insert "the officer concerned—
	(i) a notice of the Secretary of State's intention to require the exercise of that power; and
	(ii) an explanation in writing of the Secretary of State's grounds for requiring the exercise of that power;"
	On Question, amendment agreed to.
	[Amendments Nos. 126 and 127 not moved.]

Lord Rooker: moved Amendments Nos. 128 and 129:
	Page 30, line 31, at end insert—
	"( ) After subsection (3) there shall be inserted—
	"(3A) At an inquiry held under subsection (3)—
	(a) the Commissioner, Deputy Commissioner or, as the case may be, the chief constable in question shall be entitled, in accordance with any regulations under section 42A, to make representations to the inquiry;
	(b) the Metropolitan Police Authority or, as the case may be, the police authority concerned shall be entitled, in accordance with any regulations made under section 42A, to make representations to the inquiry.
	(3B) The entitlement of the Commissioner, Deputy Commissioner or, as the case may be, the chief constable in question to make representations shall include the entitlement to make them in person."
	Page 30, line 45, after "constable" insert "a written explanation of the authority's grounds for calling upon him to retire or to resign, to give him"
	On Question, amendments agreed to.
	Clause 31 [Regulations concerning procedure for removal of senior officers]:

Lord Rooker: moved Amendment No. 130:
	Page 31, line 14, at end insert—
	"( ) Before making any regulations under this section, the Secretary of State shall consult with—
	(a) persons whom he considers to represent the interests of police authorities;
	(b) persons whom he considers to represent the interests of chief officers of police; and
	(c) such other persons as he thinks fit."
	On Question, amendment agreed to.

Lord Bradshaw: moved Amendment No. 131:
	Before Clause 34, insert the following new clause—
	"SPECIAL CONSTABLES
	(1) The chief officer of police of a police force maintained for a police area who appoints special constables in accordance with section 27 of the Police Act 1996 (c. 16), shall submit to the police authority for that area a draft scheme relating to the appointment, deployment and progression of such special constables.
	(2) A draft scheme submitted under this section shall include the chief officer's proposals for—
	(a) the recruitment, appointment, retention and progression of special constables;
	(b) the arrangements for the provision of training for special constables;
	(c) the arrangements for the provision of equipment for special constables;
	(d) the arrangements for the making of payments to such special constables and the circumstances in which special constables shall be eligible for such payments; and
	(e) an estimate of the costs to the police fund kept by the police authority of the scheme as a whole and each of paragraphs (a) to (d) above.
	(3) Before approving any such scheme, the police authority may, after consulting the chief officer, revise or amend it.
	(4) The chief officer may from time to time submit draft proposals for a revised or modified scheme to the police authority for its approval."

Lord Bradshaw: My Lords, before speaking to the amendment, which stands in the names of myself and my noble friends, I should declare that I am an elected member of a police authority. Regardless of the earlier comments of the noble Lord, Lord Corbett of Castle Vale—who said that he had never made representations to an elected member during 23 years in the other House—I am an elected member. I am surprised that he went through 23 years without meeting one, which probably reflects on him as much as it does on any police authority. I represent 610,000 people in the county of Oxfordshire and I am accountable to every county councillor for the behaviour of the police authority. So there is a democratic line of accountability, of which I am a part. I resent the remarks that were made earlier. They were thoroughly uncalled for.
	In Committee, we had a useful debate on special constables—the subject of the amendment—where their commitment and work was rightly praised on all sides of the House. The Minister assured us that his department was actively looking at the issue of making payments to Specials, possibly through amending existing statutory instruments, which would not require primary legislation. He also said that a range of work was under way to tackle issues such as training, recruitment and so on. That was welcome news, which I know is fully supported by the APA and everyone involved in police work. The Minister recognised the principle behind the amendment, and what we are trying to do is very much in line with the Government's aims.
	We have returned to this amendment because we believe that it is vital that the issue of the Special Constabulary is addressed. It is important that we are making the best use of the Special Constabulary before we turn our attention to the issue of community support officers and accredited persons, which we shall do tomorrow.
	The purpose of the amendment is to ensure that all police authorities and forces have in place a coherent strategy for the use and deployment of Specials. It does not, as the Minister mischievously suggested, require the authorities and forces to have special constables if they do not wish to do so—although it would be a rare force which did not wish to have special constables. It will not place any new burden on the service. I am sure that every police force would welcome a coherent strategy.
	We know that the number of special constables has declined rapidly, a decline matched by the inactivity of the Home Office in this respect. This is a matter which demands attention because the payment of Specials would be a ready made vehicle for increasing the numbers of the Special Constabulary at once. The amendment would ensure that authorities and forces have in hand a properly resourced strategy for recruiting, promoting, training and equipping Specials. I am sure that it is a way in which we could quickly boost the number of uniformed officers on the streets.
	So I hope that the Government will give the amendment serious consideration. What we should like to hear above anything else is a date by which an order will be published, so that we know, even if it is some time in the future, that we can get on with recruiting and paying special constables. I beg to move.

Lord Dixon-Smith: My Lords, in principle we support the amendment, albeit we believe that more original thinking is needed on the issue of special constables. The 1996 Act currently contains the section under which special constables are appointed. It is somewhat limited in terms of the breadth of provisions that can be made by regulation. To that extent, this amendment would assist. I hope that the Government will agree to consider it seriously and that they will not reject it out of hand. This is a serious matter.
	Good though the amendment is, I am bound to say that it will not provide the kind of radical thinking that is required if we are ever to stimulate and rejuvenate the special constables process. That will be an occasion for a different debate. As I said, in principle we support the amendment.

Lord Bassam of Brighton: My Lords, in spirit, we are there. I do not think that there is much disagreement that volunteering is a jolly good thing. One of the things that I remember most from my time as leader of my local authority is the fact that, if I did not agree with the chap at the end of the table, who was one of our chief officers, he had the opportunity to arrest me at demonstrations on Saturdays. We were all in it together somehow.
	The Government are committed to increasing the size of the special constabulary. It has been in decline for some years. We share the aims behind the amendment. However, we believe that we can achieve the objectives more effectively through other means.
	We feel that the proposed new clause risks further fragmentation and lack of clarity about the role and conditions of service of Specials at a time when we are working with stakeholders to provide the clarity that is needed and uniformity for the special constabulary in response to feedback from Specials themselves.
	Asking individual forces to determine whether and, if so, how much Specials should receive by way of payment will prove divisive. We believe that it would also lead to Specials measuring how much a force valued them in terms of financial rewards rather than in terms of the training and management efforts made. It could also undermine the voluntary status of Specials.
	The Government are considering the case for a new allowance for Specials in recognition of the commitment made by them and, more importantly in some ways, by their families. That consideration will be subject to the current spending review that is being undertaken. This allowance, were it to be made, would be uniform and would apply across the country. It could be introduced via an amendment to conditions of service regulations made under Section 51 of the Police Act 1996.
	We are working on good practice guidance on the management and deployment of Specials as well as on advising the conditions of service regulations. The regulation-making power in Section 51 of the 1996 Act, together with the new power in Clause 2 of the Bill to issue codes of practice, already give us the necessary means to give statutory underpinning to any elements of good practice should it prove necessary to do so. Accordingly, while I can enthusiastically endorse the spirit behind the amendment, I cannot agree to it because of the difficulties it would cause.
	I reiterate: there are many good things going on. We are mounting a national press campaign linked to the "could you?" campaign for regulars which was run in January this year. We are trying to do all that we can to attract special constables back into the service.
	It is true that there has been a national decline over the past few years. Part of that is explained by the fact that many people who want to come forward into the police service, instead of using the Specials as an interim route, are going straight into the service itself, recognising that that is a better long-term career prospect.
	We want to encourage volunteering. There is agreement across the House on that. However, well intentioned though the amendment is, we do not feel that it is the best way to achieve the objectives sought by the noble Lord, who has so much experience in the area. Those objectives are shared across the three main parties. For those reasons, I hope that the noble Lord will feel able to withdraw the amendment.

Lord Bradshaw: My Lords, I thank the Minister for his reply. Unfortunately, volunteering requires some form of payment to turn it into a satisfactory contribution towards policing. Until the issue of payment is addressed, we shall remain short of volunteers. We shall return to the issue at every opportunity until some concession is made. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Rooker: I beg to move that consideration on Report be now adjourned.

Moved accordingly, and, on Question, Motion agreed to.
	House adjourned at six minutes past ten o'clock.